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DJs Buy Their Own Music Online With Stolen Credit Cards To Grab Royalties

from the scheming dept

Thu, Jun 11th 2009 12:48pm — Carlo Longino

A group of people in the UK have been arrested after they allegedly put their own music on the iTunes Music Store and Amazon, then purchased it with stolen credit-card numbers. Police say they made 19 tracks and put them up in the shops, then spent about $750,000 on the music, grabbing about $330,000 in royalties from the purchases. It's quite the scam, since one difficulty in stealing credit-card numbers is converting them into cash. One way to do this is to sell the numbers themselves; another common way for people to do this is to take a stolen card, then go buy gift cards from a store with it, then sell the cards on the street at a discount. But selling Wal-Mart gift cards and hawking them on the street seems like an awful lot of work, compared to what a criminal with a computer and some music software can do. Of course, it's not too smart to continually buy the same tracks over and over with 1,500 stolen cards...

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Filed Under: music, royalties, scams, stolen credit cards

11 Comments

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pwb, 11 Jun 2009 @ 1:27pm

That's one of the dumber things I've read. Monetizing stolen credit cards in that way is moronic. Since the unauthorized credit card use would get reported long before any royalties are paid out, the scheme is simple to spot.
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BullJustin (profile), 11 Jun 2009 @ 1:43pm

Re:
It's only simple to spot when the criminals are stupid and greedy. If they were to buy each track once or twice with several (hundred) different cards then no one would notice. It might even be a way to boost your exposure if iTunes uses any kind of notification of what's getting hit a lot that day. They wouldn't get as big a payout up front, but it would be a much more sustainable model.
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Anonymous Coward, 11 Jun 2009 @ 1:47pm

Simple to spot if you're looking for it. On the credit card receipt I'm assuming it just says "Apple" or "Itunes" or whatever, and doesn't actually list the song you bought. Out of all the stolen credit cards out there, something like this would just be lost in the clutter of the more usual ways to make money off them. Especially if it was done over a period of months, or a year or two. Its actually pretty smart.
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BullJustin (profile), 11 Jun 2009 @ 1:51pm

Re:
Now that I've thought about this a little, I recant. It might be easy to spot once people complained about the charges and they noticed several charges on the same account, or do credit card companies even report bad charges to the retailer? Do they just eat the losses and hope no one finds out how easy to steal their numbers?
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Anonymous Coward, 11 Jun 2009 @ 2:24pm

It'd be a good way to maximize the credit card's potential profit.

Buy a few gift cards from different stores, buy some of your own music a few times + random music to cover your tracks, then sell the credit card number to someone else.

The problem with criminals is they're too greedy. If they had only spent say $200,000 on their own music and an equal or greater amount on 'noise music' for ~$100k profit they might have gotten away with it.
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PRMan, 11 Jun 2009 @ 2:30pm

Gold Record?
Don't you think that people are going to notice when they give themselves a "Gold Record" on Amazon's list or SoundScan? Not too many albums go gold, and if a complete no-name indie album (that wasn't good) went "gold", people would notice real quick.

They would stand out on those lists like a sore thumb.
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Anonymous Coward, 11 Jun 2009 @ 3:42pm

Re: Gold Record?
Yeah, and honestly, if people suddenly see a record no one has heard about appear as a bestseller, the first thing they'll think would definitely be "Oh my god this is a conspiracy I bet an underground cabal of DJs are using stolen credit cards to buy their own music and collect the royalties." No dumbey, they're going to think "Who's this band? I've never heard of them before but they must have a pretty good CD if it is selling so well. Maybe I'll buy it."

That just leads to more sales for the DJ Cabal. You're assuming too much after the fact because this scam has been uncovered.
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Anonymous Coward, 11 Jun 2009 @ 3:54pm

think of the children
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Anonymous Coward, 11 Jun 2009 @ 6:07pm

So does this mean music piracy helps in the battle against credit card fraud and identity theft?
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Alex, 14 Aug 2009 @ 4:36am

Sneaky, but pretty clever if you ask me. At about 10c per song downloaded they gonna have to buy a whole lot!
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Anonymous Coward, 14 Apr 2010 @ 6:06pm

Re:
you get $1 per sale.
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