Visa is warning financial institutions that it has received reliable intelligence that an organized criminal group plans to attempt to move large amounts of fraudulent payments through a merchant account in Eastern Europe, possibly as soon as this weekend.
In an alert sent to banks, card issuers and processors this week, Visa said it “has received intelligence from a third-party entity indicating that a criminal group has plans to execute “a large batch settlement fraud scheme.”
From the alert:
The criminals claimed to have access to account numbers and the ability to submit a large batch settlement upload to occur over a weekend. Visa does not have any information as to when the fraudulent settlement activity may occur. The criminals claim to have access to a merchant account placed with a bank in Eastern Europe.
Upon receipt of this notification from the third-party, Visa immediately implemented monitoring of large settlement activity for banks located in Eastern Europe. To date, Visa has not seen abnormal or large settlement activity. Visa is continuing to monitor and will alert any affected Visa clients of abnormal activity, if necessary.
Although the source of the information is reliable, the information that Visa has received coming forward so far is limited. Visa suspects that this scheme may be linked to a consortium of online merchants that have been trying to secure processing arrangements after being shut down at several acquirers across many geographies.
Visa said institutions should start monitoring for large or unusual settlement activity, conduct monitoring daily, especially over weekends and long holidays, and review settlement and chargeback activity for high risk merchants and agents.
It’s unclear why banks wouldn’t already be looking for unusual settlement activity and conducting daily monitoring, but there it is. At any rate, “high-risk” merchants generally handle the dicey and vicey types of online commerce, such as Internet gaming, adult Web sites, rogue anti-virus software sales and online pharmacies. Might be a good idea to keep an extra close eye out for these types of unauthorized charges over the next few days.
Visa urged institutions and processors that in the event that they detect this type of fraudulent activity, “immediate action must be taken to investigate, limit the exposure of cardholder data, notify Visa, report investigation findings, and inform your local FBI office or local law enforcement.”