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Author Topic: Credit card fraud not something new to IS  (Read 5701 times)

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« on: December 28, 2010, 20:51 »
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I think you all might want to take a look here:

http://800notes.com/Phone.aspx/1-403-265-3062/4

This was just posted in the IS forum in this thread:

http://www.istockphoto.com/forum_messages.php?threadid=286152&page=16

edited to add:
maybe totally unrelated, maybe not. The latest post is by someone from 12 hours ago.
« Last Edit: December 28, 2010, 21:17 by cclapper »


« Reply #1 on: December 28, 2010, 21:25 »
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Thanks Cathy __ very interesting.

So how come Istockphoto are suddenly deciding to not pay commissions to those whose work they have released? We contributors put our faith in them to look after our financial interests and pay them up to 80% of the sale price to do so. If they are failing us in this regard then they need to bear the cost of the paltry commissions and should also be paying us further compensation.

donding

  • Think before you speak
« Reply #2 on: December 28, 2010, 21:31 »
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Wow Cathy...thanks

According to these people these charges started back on Dec 14th....that's before they went on their glory vacation!!

You know what's really scary about all this? Why couldn't they take our payment information and take that also. Maybe they can't but that sorta concerns me.

« Reply #3 on: December 28, 2010, 21:33 »
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If iStock is going to adjust contributors' royalties, even though the credit card companies are on the hook for the charges, then where will that money go??? Into iStock's bank account, right? Holy crap, you guys are getting shafted left, right, up, down and sideways.

« Reply #4 on: December 28, 2010, 22:18 »
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even though the credit card companies are on the hook for the charges
Just plain and simple: this is not true.

I am not defending IS, normal company would keep bad debt generated by absent fraud detection its own responsibility, at least partially, but...

« Reply #5 on: December 28, 2010, 22:22 »
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even though the credit card companies are on the hook for the charges

Just plain and simple: this is not true.

I am not defending IS, normal company would keep bad debt generated by absent fraud detection its own responsibility, at least partially, but...


That is not necessarily true either. It depends on if the merchant showed due diligence in collecting the information.

The liability for the fraud is determined by the details of the transaction. If the merchant retrieved all the necessary pieces of information and followed all of the rules and regulations the financial institution would bear the liability for the fraud. If the merchant did not get all of the necessary information they would be required to return the funds to the financial institution. This is all determined through the credit card processory.

http://en.wikipedia.org/wiki/Credit_card_fraud

If the credit card process went down on iStock the way it was supposed to (and I don't know how it couldn't have, considering it's automated) then iStock should get to keep the money.
« Last Edit: December 28, 2010, 22:33 by caspixel »

« Reply #6 on: December 28, 2010, 22:44 »
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What you quote here is not applicable to online retailers. One piece of information that is required for this is customer signature (and comparison of this signature with one on credit card), that for obvious reasons cannot be obtained.

molka

    This user is banned.
« Reply #7 on: December 29, 2010, 05:32 »
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Wow Cathy...thanks

According to these people these charges started back on Dec 14th....that's before they went on their glory vacation!!

You know what's really scary about all this? Why couldn't they take our payment information and take that also. Maybe they can't but that sorta concerns me.

you mean may 2009

« Reply #8 on: December 29, 2010, 06:11 »
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If iStock is going to adjust contributors' royalties, even though the credit card companies are on the hook for the charges, then where will that money go??? Into iStock's bank account, right?
right  :( , may be you should change the subject to "where will that money go???"

« Reply #9 on: December 29, 2010, 06:16 »
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Obviously, money will go back to the individuals whose Credit Card's data has been stolen and used. And, by the way, judging by the fact that any of these posters doesn't have the slightest idea of "what istock is" (so they never bought there)  it seems that there wasn't any breach of security at istock, probably CC data was obtained elsewhere.
« Last Edit: December 29, 2010, 08:05 by loop »

« Reply #10 on: December 29, 2010, 08:16 »
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Obviously, money will go back to the individuals whose Credit Card's data has been stolen and used. And, by the way, judging by the fact that any of these posters doesn't have the slightest idea of "what istock is" (so they never bought there)  it seems that there wasn't any breach of security at istock, probably CC data was obtained elsewhere.

That may be true. It looks like someone has stolen credit card numbers from random people. But istock is the target for some reason, and that fraudulent charges have been incurred since 2009, means that the system doesn't seem to be working correctly at IS. Wouldn't someone have been prosecuted by now for that fraudulent activity of using istock's name and phone number for the charges?

ShadySue

« Reply #11 on: December 29, 2010, 08:23 »
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Obviously, money will go back to the individuals whose Credit Card's data has been stolen and used. And, by the way, judging by the fact that any of these posters doesn't have the slightest idea of "what istock is" (so they never bought there)  it seems that there wasn't any breach of security at istock, probably CC data was obtained elsewhere.
Seems like in the past, the fraudsters have been pretty smart in only buying smallish bundles from iStock from each stolen credit card number. So wouldn't raise suspicion until iStock got the claims from the worried cardholders or their cc companies.

ShadySue

« Reply #12 on: December 29, 2010, 08:24 »
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If iStock is going to adjust contributors' royalties, even though the credit card companies are on the hook for the charges, then where will that money go??? Into iStock's bank account, right? Holy crap, you guys are getting shafted left, right, up, down and sideways.
From the first link Cathy posted, it looks like iStock has been paying back the scammed cardholders directly when contacted.

ShadySue

« Reply #13 on: December 29, 2010, 08:36 »
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According to these people these charges started back on Dec 14th....that's before they went on their glory vacation!!

It seems that the first report on that site was actually 14 Feb 2009, though for relatively small amounts, not the sort of huge credit bundles which seem to have been at the root of the current scam.
However, it certainly looks likely that the downloaded images are very likely to end up being redistributed somewhere, and I guess there's not much can be done.
I'd imagine for a minute that other companies, including amazon, are similarly affected. It's a problem inherent in the nature of online trading.

« Reply #14 on: December 29, 2010, 08:44 »
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I figured as soon as whitemay posted that reference to the trouble on the 800note site, the thread would get locked.

I am certain too that online companies have this problem, but I'm thinking that it is mostly done on a small scale. In other words, a pattern is noticed, perpetrator caught and prosecuted.

This 800note cc stuff has been going on since 2009 and has hit in a big way. Seems like that should have warranted some sort of law enforcement intervention. And really, since IS knew this had been going on (and we didn't) wouldn't that be an even bigger reason not to have the company unprotected during the holidays and announce it to the world? Wouldn't that be an ever HUGER reason to make absolutely certain there were no holes in security before pushing through a whole new website redesign? I suppose, of course, that the old design might have been as holey as a sieve, too, though.  :-\

ShadySue

« Reply #15 on: December 29, 2010, 08:53 »
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I figured as soon as whitemay posted that reference to the trouble on the 800note site, the thread would get locked.

I am certain too that online companies have this problem, but I'm thinking that it is mostly done on a small scale. In other words, a pattern is noticed, perpetrator caught and prosecuted.

This 800note cc stuff has been going on since 2009 and has hit in a big way. Seems like that should have warranted some sort of law enforcement intervention. And really, since IS knew this had been going on (and we didn't) wouldn't that be an even bigger reason not to have the company unprotected during the holidays and announce it to the world? Wouldn't that be an ever HUGER reason to make absolutely certain there were no holes in security before pushing through a whole new website redesign? I suppose, of course, that the old design might have been as holey as a sieve, too, though.  :-\
This sort of scam, at least the earlier ones with smaller amounts of money, aren't a result of iStock's site security. This can happen even with over-the-phone orders - someone steals a card and uses it to purchase something. Hey, the very first credit card I ever got had someone else's new card inside my envelope - if I'd been dishonest, it would have been a dream for a week or two. Even in the old days of cheques, I remember once buying a pair of shoes in a shop. The shop assistant said she would stamp the shop's name on the 'to' line, which was quite standard, and I didn't think to watch her doing it. When the cheque was returned, her name (or if she was smart, maybe a pal's) was on it, and it took me a while to work out that's what had happened. Trouble was, I'd been in several shoe shops, and couldn't remember which one I'd actually purchased the shoes from, so she got off with it.

helix7

« Reply #16 on: December 29, 2010, 09:19 »
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That is not necessarily true either. It depends on if the merchant showed due diligence in collecting the information.

The liability for the fraud is determined by the details of the transaction. If the merchant retrieved all the necessary pieces of information and followed all of the rules and regulations the financial institution would bear the liability for the fraud. If the merchant did not get all of the necessary information they would be required to return the funds to the financial institution. This is all determined through the credit card processory.

http://en.wikipedia.org/wiki/Credit_card_fraud

If the credit card process went down on iStock the way it was supposed to (and I don't know how it couldn't have, considering it's automated) then iStock should get to keep the money.


In any case, it seems unreasonable that the manufacturer of the product is ultimately the one who loses out financially. These fraudulent charges should be the responsibility of either istock or the credit card company. Never the contributor.

I've used the lawn mower analogy before, and I'll briefly re-state it here since it's relevant: If I buy a lawn mower at Sears with a stolen credit card, either Sears or the card company absorbs the loss. The lawn mower manufacturer doesn't get charged for the loss. I don't know why it's ok in stock to pass fraud losses on to the contributor.

In istock's defense, they're not alone in this practice. Many other microstock companies also charge fraud losses back to the contributor.

It's a despicable practice, but unfortunately it's another one of those unfortunate realities we face in a business where the agencies are pretty much free to do whatever they want, knowing that there's not much we can do about it.

« Reply #17 on: December 29, 2010, 09:35 »
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Not much we can do about it, correct.

I don't understand how it's possible that iStock supposedly paid back some scammed victims' money directly...

Once I had my CC info stolen, I was reimbursed by the CC company and not the retailer where the card information was (ab)used.

This is really "bad" for exclusive contributors who offer higher priced imagery. If those images pop up on file sharing sites, it devalues their work tremendously.

And can/will iStock legally pursue every appearance of unlicensed Vetta usage? I'm not sure.

I'm sure though they will pursue some infringements but who will get to keep the money for damages? iStock, the contributor or both?
I think I know that answer...

ShadySue

« Reply #18 on: December 29, 2010, 09:45 »
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I don't understand how it's possible that iStock supposedly paid back some scammed victims' money directly...
Once I had my CC info stolen, I was reimbursed by the CC company and not the retailer where the card information was (ab)used.
Did you contact the retailler? It looks from that site as though a few scammed people contacted iStock directly and were paid by them (at least, that's what they say). Whether they would also be paid by their cc company, I couldn't possibly say.
What one retailler does and what another does is totally disconnected, therefore irrelevant. Most companies may tell you to sort it through your cardholder, doesn't mean all will.

« Reply #19 on: December 29, 2010, 10:20 »
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Yesterday someone purchased three different ELs of the same image at DT.  A first, in my five years with the micros.  When I saw the sales, it immediately brought to mind this whole fraud situation at IS and left me feeling appreciative of the agencies like DT, BigStock and Alamy that implement a waiting period and delay payments in order to ensure the credit card transactions are valid.   

lisafx

« Reply #20 on: December 29, 2010, 12:07 »
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Thanks for starting a thread about this Cathy.  I was just reading that 800notes thread too.  Very scary stuff! 

Although the thread dates back to early 2009, it seems like it got much more active in November or so of this year, and the stolen amounts got larger around this time.   

It is pretty obvious Istock knew it was getting hit by an organized theft effort as early as November.  Even on the Istock thread Kelly states they knew about this before it was brought up in the forums.  So why did they make a public announcement, close the office, and go on a skeleton crew?  Unfathomable. 

donding

  • Think before you speak
« Reply #21 on: December 29, 2010, 12:15 »
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I know the stolen credit card that was used at my husbands business was an elderly man's card. When my nephew called this man directly, he said he wondered why his credit card balance was so high. He didn't even know that someone was charging on it, he didn't look to see why it was so high, he just wondered. Then when my nephew contacted the credit card company they told him that he would keep the money because that's what the insurance was for. The business would have never known it was stolen if these people hadn't brought another card it wanting to use it to pay off their balance and he checked the card and found out it was stolen and so was the previous one. These weren't just random people off the street. They were costumers. They used the excuse that an Uncle was helping them out by making their payment and no questions were ask until another card with another name was brought in. When the police were called they wouldn't arrest them because they said that was the responsibility of the state of New York to prosecute and New York won't do it because the crime was committed in the state of Alabama. No wonder they do it, if there is no threat of prosecution.

« Reply #22 on: December 29, 2010, 12:46 »
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Thanks for starting a thread about this Cathy.  I was just reading that 800notes thread too.  Very scary stuff! 

Although the thread dates back to early 2009, it seems like it got much more active in November or so of this year, and the stolen amounts got larger around this time.   

It is pretty obvious Istock knew it was getting hit by an organized theft effort as early as November.  Even on the Istock thread Kelly states they knew about this before it was brought up in the forums.  So why did they make a public announcement, close the office, and go on a skeleton crew?  Unfathomable. 

Maybe they didn't know about it? Just because Kelly says they knew about, doesn't mean I believe him. Like you said, doesn't make sense then to announce no ones home and send everyone off for the holidays. Who knows.  ???

lisafx

« Reply #23 on: December 29, 2010, 13:18 »
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Maybe they didn't know about it? Just because Kelly says they knew about, doesn't mean I believe him. Like you said, doesn't make sense then to announce no ones home and send everyone off for the holidays. Who knows.  ???

The thread you linked to has people calling Istock about large amounts (in the thousands of $) of credit card fraud in November.  Surely that escalating fraud was a red flag? 

« Reply #24 on: December 29, 2010, 13:28 »
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I don't understand how it's possible that iStock supposedly paid back some scammed victims' money directly...
Once I had my CC info stolen, I was reimbursed by the CC company and not the retailer where the card information was (ab)used.
Did you contact the retailler? It looks from that site as though a few scammed people contacted iStock directly and were paid by them (at least, that's what they say). Whether they would also be paid by their cc company, I couldn't possibly say.
What one retailler does and what another does is totally disconnected, therefore irrelevant. Most companies may tell you to sort it through your cardholder, doesn't mean all will.
My credit card company protects me from ID theft and therefore I don't have to jump through hoops by dealing with those companies that encountered fraudulent charges with my stolen CC info.

I simply give my CC company one phone call and all is settled: I get my unauthorized charges voided and a set of new credit cards. Done.

I consider it "more" inconvenient if I have to find out where my card was used, contact all of those retailers and explain to them that my card was stolen so I can get my money back from them...


 

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