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Parcel mule scam exposure by the 3rd man

The 3rd Man : 27 October, 2008  (Technical Article)
With the help of the 3rd man, ITV's Tonight programme investigates the growing fraud of parcel mules
A new and emerging fraud scam has been exposed on ITV1's Tonight programme which confronts the true face of criminals involved in deception and theft through human 'mules'. With the support of experts at card fraud protection specialist, the 3rd Man, the programme reveals how fraudsters prey on innocent victims to defraud retailers of goods.

'Money mules', the term used for people who unwittingly become duped into helping transfer illegal money, now has a less sophisticated but equally problematic spin-off: the 'parcel mule'. Instead of transferring money, innocent and vulnerable people are now being duped into handling goods obtained fraudulently, forwarding items on to criminals in other countries.

For criminals using parcel mules there is far less risk of being caught by using someone else to handle goods that have been obtained illegally using fraudulent credit cards. Mules are often recruited through fake 'job' advertisements as well as through other methods such as spoof websites and even dating sites, as highlighted in the programme.

Last month (September 2008), APACS, the UK payments association, revealed the extent of the problem in the UK as data showed 873 detected fake 'job' adverts for money mules in the first half of 2008, up 345 per cent over the last three years, and 33 per cent on last year.

However, despite the increase in attempted fraud, the fact remains that it is still safe for consumers to buy online. This is due to the diligent attitude of retailers who see card fraud as a threat to their businesses.

"With the financial climate as it is, retailers face an uncertain sales period during the run up to Christmas; the last thing they need is yet another scam that rips off more of their revenue through deception," says Andrew Goodwill, fraud expert with the 3rd Man. "Criminals may think they are invisible, but actually UK retailers have become far more savvy to techniques such as 'parcel mules' and are using shared data schemes more extensively to prevent theft.

"This is how we detected the most recent type of mule scam that will be shown in this TV programme. Although fraudsters will do their best to target UK retailers during the run up to Christmas, the fact that retailers are increasingly sharing data about criminal activity has made it even more difficult for thieves to succeed.

"This programme will also go some way to warning vulnerable individuals, particularly people using dating websites, that they should be wary of deceitful and unscrupulous individuals posing as their friends."

So far this year, the 3rd Man's Supersearch shared database detected and prevented £83,117,390.52 fraud. This figure is expected to increase significantly during the lead up to Christmas.

Shared databases contain clearly fraudulent and highly suspicious data, including listings of bad or questionable details such as email addresses, delivery addresses, phone numbers, IP addresses and card numbers.

Shared databases are not restricted to retailers as banks can also integrate their systems with services such as SuperSearch. "When fraud is detected a data feed is sent to the respective bank informing them that their cardholder has had details compromised," explains Paul Simms, CEO of the 3rd Man Group. "They can then act to re-issue the account number and possibly block the card. In the same way the banking community succeeded with Chip and PIN, this is another major way to protect retailers from card not present fraud."

ITV1's Tonight programme is on Monday 27th October at 8pm

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