Biggest Hacker Heist Gets Bigger!
Reuters today reports that U.S. federal prosecutors charged five men in a hacking-based credit card theft ring that cost more than $300 million in losses.
Its the biggest cyber crime ever committed.
The accused are alleged to have stolen 160 million U.S. and foreign credit card numbers. Targeted companies included Visa licensee J.C. Penny, Jetblue Airlines and French retailer Carrefour SA.
Prosecutors said the thieves charged $10 for U.S. cards, $15 for ones from Canada and $50 for European ones, which are more expensive because they have secured computer chips.
Are the total losses only $300 million? A quick run through the numbers reveal this crime could be much, much bigger than reported.
Russian Dmitriy Smilianets, 29, is accused of selling the stolen data and distributing the profits to the other four Russian and Ukrainian conspirators. This is another proof that cyber crime is international and that it is a way of life in eastern Europe.
Assume for a moment that all the stolen numbers were just the cheap $10 American kind. If all the card numbers were sold then the five criminals would have made $1.6 billion. That is BILLION, with a capital “B”!
That doesn’t include any losses that card holders or companies might have suffered. Those losses only happen after the buyers of the $10 cards use them.
StatisticBrain.com reports that the Consumer Sentinel Network of the U.S. Department of Justice says that the median fraud loss per card is $399 as of 7/23/2012. For stolen cards purchased at $10 a pop, buyers realize a profit of $389/card. That is a darned good profit!!
If all 160 million stolen credit cards were used then that is a potential loss of $63.8 billion!!! That is a far cry more than the diddlysquat $300 mill in pocket change reported.
The total potential loss to customers and companies in this single cyber crime alone is $63.8 billion. That crime was committed by just five guys with computes.
Of course, probably not all 160 million credit card numbers were sold. Reuters didn’t report on that. Also, now that they are exposed, all the credit cards have probably already been reissued to minimize losses.
So real losses won’t be anywhere near the potential, but it will probably be more than $300 million. It took years to catch the perps.
Companies notoriously under report true losses because it is bad for business and their stock prices.
Cardhub.com reports Mercator Advisory Group says there was $16 billion in U.S. credit card related fraud back in 2007. The Federal Reserve Bank of St. Louis reports that back in 2006, for every $100 transaction there was 9¢ in credit and debit card losses.
Cyber crime is, by far, the most serious form of theft in the world. Anyone with a computer and hacking skills is a potential multi-billion dollar super thief.
Think about it.