A new and strange formula for credit card fraud, originating from Brazil, is targeting American credit institutions, at a time when banks are promising their customers safer transactions with their cards.
Last week, at least three U.S. banks reported tens of thousands of dollars in fraudulent credit and debit card transactions originating in Brazil, but from accounts that were compromised in the recent attack on the online retailer Home Depot.
The strangest thing, however, is that these transactions were made through the Visa and MasterCard networks, which have the special chip for transactions, but the banks have not sent the new cards to their customers.
Of course, the banks suffered the most damage since they cannot absorb the costs of such a fraud. In order for the bank to be compensated in some way, it must prove that the mechanism responsible for the damage belongs to a third party, as in the case of Home Depot. However, the cost of such an attack from cards equipped with the special chip is fully borne by the bank.
A small example was reported of a small bank in New England that was credited with approximately $120,000 in fraudulent transactions from stores in Brazil in less than 2 days. Although it was able to block $80,000 of transactions, the system that allows transactions when the bank is closed allowed the rest. All transactions were from the MasterCard network and thanks to the special chip on the card, no PIN entry was required.
