The US Justice Department has announced an operation against networks involved in stealing funds from consumer accounts through “microtransactions.”
This crackdown forms a crucial part of the Consumer Protection Branch’s broader strategy to combat financial fraud.
These fraudulent networks have been employing a cunning tactic to pilfer money from consumers’ financial accounts. They use what’s known as “microtransactions” or “microdebits.” By blending unauthorized charges with numerous low-value transactions, they manage to lower their chargeback rate. A chargeback, in essence, is a transaction reversed or refused by a bank when flagged by an account holder. Since a high rate of chargebacks often leads to increased scrutiny or even closure of accounts, these microtransactions serve as a smokescreen, masking the real fraudulent activities.
The civil actions unsealed recently aim to obtain temporary restraining orders and appoint receivers to prevent these fraudsters from dissipating assets. These measures signify a determined effort by the department to halt such fraudulent activities, which not only target individuals but also small businesses across the United States.
Highlighting the significance of these actions, Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, emphasized the department’s commitment to using every available tool to prevent these fraudsters from accessing and stealing from victims’ bank accounts.
Further stressing the scope and success of these investigations, Inspector in Charge Eric Shen of the U.S. Postal Inspection Service (USPIS) Criminal Investigations Group, highlighted the uncovering of extensive fraud schemes and the prevention of millions of dollars in potential losses to victims nationwide. The USPIS’s dedication to protecting American consumers and small businesses from such fraud schemes was reiterated.
This crackdown is a clear indication of the growing concern and proactive steps being taken to combat the increasing sophistication of financial frauds, especially those involving the burgeoning FinTech sector.
“The department is committed to using all of the tools at its disposal to prevent fraudsters from reaching into victims’ bank accounts and stealing their hard-earned savings,” said Justice Department Civil Division head Brian M. Boynton. “The great work by postal inspectors in these investigations uncovered far-reaching fraud schemes, and millions of dollars in loss to victims across the country,” added USPIS Criminal Investigations Group Inspector in Charge Eric Shen.
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