Members of a fraud ring were charged with compromising Target’s internal gift-card system and defrauding customers out of almost $800,000. A federal grand jury in Seattle, Washington, has charged five members of a fraud ring with compromising the internal gift-card system at Target and defrauding both the company and its customers out of nearly $800,000, the Department of Justice reported today. Between May and December 2017, the perpetrators allegedly stole $785,000 in gift-card balances and sold illegally purchased products and gift cards for bitcoin over an online marketplace.
They used an algorithm to reverse-engineer and figure out the bar-code numbers on authentic gift cards and verified their balances through Target’s automated customer service line. From there, they could load active card numbers into a mobile app or electronic wallet and shop at Target using the cards. When legitimate shoppers tried to use their gift cards, they found the balance was zero. Target altered its gift card system in December 2017 and put an end to the fraudsters’ operation. All those indicted are being charged with wire fraud, which is punishable by up to 20 years in prison. [Source: Dark Reading]