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The Invisible Threat: IBO Merchants Bypass Every Bank Control đ°
Frank McKenna
January 21, 2025
Hi fraud fighters, đ
What a week it was. With the TikTok flip flop, more CFPB fines, a rash of new executive orders itâs clear times are changing. And when things are changing rapidly fraud and scams are always on the rise.
Letâs check out the top stories this week!
đ„ This Weekâs Top Fraud Highlights đ„
FIS Mobile Banking Snafu: Last week, Thousands of customers of 26 banks reported widespread issues with their deposits and mobile apps. While Capital One claims no fraud or hacking was involved in the incident, many are still wondering about the root cause: a power outage at an FIS facility.
Big Missile Money - North Korean hackers stole a record $1.3 billion from crypto platforms, accounting for 61% of all crypto thefts. Imagine all that money flowing back into their missile programs.
Hindenburg was right - Remember when Hindenburg exposed Cash App for fraud running amok? It turns out he was right, and this week, CashApp agreed to pay 255 million in fines and rebates to customers impacted by fraud.
Fraud Fighter Closes ShopâNate Anderson, the founder of Hindenburg, abruptly closed his business last week, shocking many, including me. His highly detailed reports on fraud and corruption had taken down giant companies in the previous eight years.
Massive Gaming Fraud - Elon Musk was accused of gaming fraud after he reported that he was ranked the best in the world at Diablo. Check out the expose here.
Charlie and The Fraud Factory- Her empire is cracking as the fraud trial begins against accused Chase fraudster Charlie Javice. Her co-defendant, Oliver Amar, plans to flip and testify against her.
Geospy: This new AI solution can instantly tell where most photos were taken, providing law enforcement with a shockingly accurate investigation tool.
Too Good - Apparently, Jury Duty scammers are getting way too good at their scams, which are nearly undetectable, according to this one Reddit user.
Ominous - Sam Altman is scheduled to have a closed door meeting with US Officials and many expect he will discuss a new AI breakthrough that has OpenAI employees âJazzed and Spookedâ at the same time.
This IBO Merchant Straw Owner Scam Is Getting Out Of Hand. People Donât Get It.
Have you heard of this scam?
It's called the Independent Business Operator (IBO) Scam. In. this scam, people looking to make a few bucks sign up to become straw owners for websites that sell high-risk subscriptions or other questionable products with high chargeback rates.
The scam is designed to bypass Visa and Mastercard's high-risk merchant controls, and itâs getting wild. I wrote about a big case last year involving CBSurety, and I received emails from some victims who felt betrayed and angry.
People are getting roped into this scam, handing over their PII, and fraudulent merchants are running their good names into the ground. People donât realize their identities are being used to sell illicit goods, enable scammers, and more.
This week, Miami party boy Daniel Liburdi was involved in a $128 million bank fraud involving unwitting straw owners who carried out various fraudulent activities.
Bulkholts State Bank, with 15 employees operating from just three locations in the small town of Bulkholts, Texas, stands in stark contrast to its opponent, Navy Federal Credit Union, which boasts 13.8 million customers, $177 billion in assets, and more than 24,500 employees worldwide.
That isnât stopping the tiny bank from launching a class-action lawsuit against Navy Fed for what it says are lax fraud controls at the credit union. These controls are causing hundreds of millions in check fraud losses for downstream banks.
This interesting lawsuit may shape opinions on check fraud and identity theft.
Living in Hell: A Scammer Post A Plea For Help
Bounty channels are everywhere on Telegram and provide a glimpse into scammers' horrific lives - sometimes by their choice.
One such channel is Southeast Asia Reward, where scam bosses, scammers, and families of missing loved ones post pleas for help and offer rewards.
One post, in particular, caught my eye. It described a man recruited to Cambodia to work as a mid-level manager at a scam compound. He did his boss dirty and stole customer (aka victims) information, giving it to a competitor, and his life took a turn for the worse.
He Told Them Checks Were Altered, They Gave The Crooks The Money Anyway
A Mississippi attorney's warning to his bank about stolen checks fell on deaf ears, and nearly $14,000 was paid to fraudsters who altered the payee on IRS payment checks right in front of bank tellers.
Despite John Reeves telling BankPlus staff that a forger was present in the drive-through window, the bank proceeded to cash the checks and give the money to the fraudster. đ
Why o why would they do that?!
Another Deepfake Horror Story: Teacherâs Life Nearly Ruined
Another horrific deepfake that nearly ruined a personâs life.
A high school teacher's act of friendship turned into a nightmare when her innocent campaign interaction was transformed into a viral racist deepfake video. Cheryl Bennett faced death threats and police investigation and nearly lost her career after a TikTok lawyer shared doctored footage showing her allegedly making racist slurs.
This Tiny Article From 1981 Went Virtually Unnoticed, But It Was A Fraud Turning Point
On August 19th, 1991, a tiny article appeared in the New York Times's back pages, and no one noticed. Fast-forward over 40 years, and itâs now apparent how pivotal it was.
The tiny article announced a new system called Visa Loss Control, the first attempt to establish a real-time payments network. Merchants would use magnetic strip readers to authorize transactions in real-time, connecting to the central server.
They touted the network as a way to prevent fraud, but it ultimately became the basis for instant payments as we know them today.
Voice Changers Used By Scammers Work Scarily Good
Yahoo Boi, who appears to provide training material to Nigerian Romance scammers, is at it again. He also has a Telegram channel called Format Boy, where he sells his methods and software.
Check out this crazy AI voice changer that he demonstrates. These AI voice changers are used for romance scams to fool the victim into thinking they are talking to their love interest.
Car Dealers Are Getting Pummeled With Fraud And Fake IDâs
Car dealers nationwide are reporting an influx in fraud and missing cars. The first indication that something is amiss is when they discover the title is never registered. At that point, they know the car is long gone.
Journalist Jaime LaReau reports that dealerships are filing insurance claims for the losses but are finding that they are still out thousands of dollars even when they get the reimbursement check
Researchers Examined 50 Convicted Yahoo Boy Scammers: Here Is What They Found
A research study into 50 cases of romance scams provides an in-depth look into the dynamics of the Yahoo Boys and their methods.
The study is very comprehensive, shedding light on their preferences
Is China Powerless Or Complicit In The Scamdemic?
A Chinese actor's dramatic rescue last week from a forced scamming operation in Myanmar has exposed an uncomfortable truth: even China's powerful government struggles to protect its citizens from the massive "scamdemic" plaguing Southeast Asia.
With over 220,000 trafficking victims worldwide and billions stolen annually, some experts like Erin West question whether China is truly powerlessâor complicit.
Thanks for reading my weekly update on fraud and scams. Please let me know if you ever have a tip or story for me!