Researchers at the premier dark web data intelligence company, Terbium Labs, have released the findings of new research that examines the deeply intertwined nature of payment fraud and transnational crime. Results from the report titled, “The Next Generation of Criminal Financing: How Payment Fraud Funds Transnational Crime,” illustrate the far-reaching effect of payment fraud – where and how stolen payment data is used to either fund or launder the proceeds from large-scale, pernicious criminal activity across the world. The research features geographical breakdowns and real-world case studies of how payment-card fraud is used to launder money by organized crime syndicates; subsidize the costs of trafficking in drugs, guns and humans; and provide material support for terrorist groups at levels in the billions of dollars.
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Where and how stolen payment data is used in transnational crime throughout the world. (Graphic: Business Wire)
Researchers analyzed thousands of cases during the decade-long period of 2008-2018 in the United States, United Kingdom, Australia, Canada, Germany and Russia. Data was sourced from publicly available documentation from an international set of crime and law databases. Findings indicate widespread gaps and inconsistencies in crime documentation as victims are more likely to turn to their financial institution for quick remediation than to report the crime to law enforcement. Similarly, financial institutions and payments companies often treat payment fraud as an expected cost of doing business and don’t always report compromised accounts or fraudulent charges experienced by customers.
These gaps in reporting mask the true scale and spread of fraud funding transnational crime. As such, the findings in this report are only the tip of the iceberg and underscore much needed reform by ﬁnancial institutions and law enforcement agencies in how they document, investigate, and ultimately work to prevent payment fraud.
“With payment card fraud at an all-time high and the presence of dark web carding markets enabling fraud at massive scale, the ﬁnancial industry must do more to combat payment-card fraud – not only to reduce their own losses, but to cease the financing of major crimes with global impact,” said Danny Rogers, CEO of Terbium Labs. “Automated, real-time intelligence into stolen payment data on the dark web can help institutions improve their fraud management efforts and integrate dark web data into Common-Point-of-Purchase (CPP) analysis, risk assessment, and fraud estimation capabilities – predicting, combating and eliminating fraud before it happens.”
A summary of key findings from the research follows:
- North America has the highest rate of terrorism linked fraud cases, with more than seven times as many cases as Europe.
- Europe as a whole sees significant fraud links to organized crime, drug traﬃcking, and money laundering.
- Eastern Europe uses payment fraud to support drug traﬃcking, money laundering, and organized crime.
- Western Europe shows higher rates linking payment fraud and human traﬃcking.
- Even with extensive gaps in case documentation, researchers identified more than $1 billion in fraud losses associated with the transnational criminal cases examined.
“Payment fraud is not just a fraud problem. It can no longer be viewed as a non-violent crime, mere annoyance, or unfortunate cost of doing business,” said Emily Wilson, VP of Research at Terbium Labs. “Criminal justice agents must strive for a fuller understanding of the role fraud plays in serious criminal cases and the shifting landscape of the fraud economy. We’re calling on the criminal justice system to create updated, standardized reporting requirements for investigations and case documentation in order to accurately and consistently track the links between payment fraud and transnational crime.”
To learn more about the methodology used and to obtain a copy of “The Next Generation of Criminal Financing: How Payment Fraud Funds Transnational Crime,” please visit: https://go.terbiumlabs.com/rd-wp-next-gen-criminal-financing-pr
About Terbium Labs
Terbium Labs gives organizations unprecedented visibility into their exposure on the dark web. Leveraging Matchlight, the world’s most comprehensive, continuous and fully private dark-web data monitoring system, along with a team of on-demand analysts to assist with incident response and investigation, Terbium Labs provides the real-time intelligence, context, and scale needed to prevent fraud, mitigate risk, and ensure round-the-clock account protection. Featuring its patented data-fingerprinting technology that monitors for specific data without requiring it be shared with Terbium Labs or stored anywhere, and built on top of a state-of-the-art web crawler, Matchlight is available as a managed service for corporate data exposure or as a data source for payment card or other unstructured data. Learn more about Terbium Labs’ approach to dark-web monitoring, breach detection, and fraud prevention by visiting www.terbiumlabs.com or on Twitter @TerbiumLabs.