0:00

this is kind many from

0:02

n p r,

0:05

i'm going go out on a limb and

0:07

say, there are two kinds of in

0:09

the world the ones who when they

0:11

find a twenty dollar bill on the street, or

0:13

like they ,

0:15

in their pocket, maybe get themselves a little treat,

0:18

then they're then people who get

0:20

hung up wondering

0:21

where did this money come from?

0:24

should i i try to figure out dropped it?

0:26

nina

0:26

collars is definitely

0:28

in the second camp

0:30

the and a version of that little dilemma happened

0:32

to her not too long ago when she bought

0:34

a classy missy

0:35

are we plugging front of stress of can

0:37

i say

0:38

and always an espresso as you think

0:40

it's a great product

0:41

i am literally drinking minus

0:43

of

0:44

right now miss bresso is

0:46

nestle his version of a coffee maker

0:48

that uses those little coffee pods

0:50

big in europe canada aimed at people who like

0:52

fancy espresso but don't have time to go

0:54

to the cafe and don't mind burning do a bunch

0:56

of pots the pods companies different blends

0:59

and intensities and sounding as like i

1:01

am to get a sampler pack a bunch of different pods

1:04

but instead of buying them and suppressors

1:06

website she starts looking for a deal on

1:08

e bay

1:09

the up she finds a sampler pack for

1:11

half off

1:12

what what with your theory of how they were selling it

1:14

for half the price

1:17

i didn't know so either

1:20

, coffee is getting close to expiring or

1:22

or somebody had gone in and purchased

1:24

a whole bunch him when you purchase a whole bunch sometimes

1:26

you get extra for free and they were trying

1:29

to make trying to off of it right

1:31

so people try to sell off the perks i get for being

1:33

part of a loyalty program or some

1:34

the better you know the asserting that guess you miners

1:37

did this fall off the back of a truck wink wink

1:39

right but she decides

1:42

the probability that had stolen

1:44

is low

1:45

though she make the order and she's keeping

1:47

an eye out for a box two

1:49

days later comes home this is when

1:51

the weirdness starts

1:52

and there's too many

1:54

boxes and

1:55

my door to boxes to be specific

1:58

which is one more than shoes expecting

1:59

and i know i'm waiting for the coffee

2:02

run in know but like what is this other

2:04

stuff innocent

2:05

just a number of boxes

2:07

i thought i was gonna get you

2:10

know a junkie box sent by somebody who packed

2:12

up her

2:13

finale from ebay

2:15

classic ebay from be packaged

2:17

in

2:19

a box not it's it's a legit espresso

2:23

that packed beautiful okay

2:25

and i'm

2:26

thinking to myself

2:28

this is a little years straight she

2:31

opened the first box and sure enough

2:33

there are the coffee but she ordered which

2:36

makes the extra bucks even more mysterious

2:38

the open up the other box and is suspicious

2:41

of a scene and i was like to says

2:43

there's definitely some

2:43

wrong because she's just received a

2:46

fancy coffee machine worth about two hundred

2:48

bucks directly from this press so

2:50

that she definitely hadn't ordered

2:53

to tax credit card to see if she got charged

2:55

for it's but

2:57

now

2:58

there's just her payment to some sour on

3:00

e bay a most of us at this point

3:02

would be kind of site

3:04

the controversy great carry on

3:06

nina is different than most of us

3:09

she's highly suspicious very skilled

3:11

and there's nothing she loves more than an internet

3:14

mystery i ,

3:16

to now i wanna know what's going on

3:18

going want to know what is going on

3:21

did i order something from ebay?

3:23

it came from an the there's beautiful

3:25

puzzle that's sitting on my counter giving

3:27

me caffeine and fantastic and so this

3:30

is what doing this evening you

3:32

know, wouldn't spend one over-caffeinated

3:34

evening, she would spend day's

3:36

overcaffeinated weeks trying

3:39

to crack the case of the extra nespresso

3:41

machine hello

3:44

, welcome to put a money i'm alexi horwitz ghazi

3:46

and i'm excited nina collars was

3:48

pretty sure she stumbled on to some sort of

3:51

and she was right she was onto something bit but

3:54

unlike most games she seemed to have come

3:56

out ahead what's not

3:58

a scam is you free stuff

3:59

today on the show he particularly

4:02

crafty internet crime a crime

4:05

perfectly engineered to avoid detection

4:07

from law enforcement and play

4:09

off one of our basest instincts

4:12

the desire for a killer deals

4:21

there you are an internet criminal maybe

4:24

the last person you want to accidentally

4:26

draw into your deceptively cheap coffee

4:28

scheme is someone like nina

4:31

collars i just want to confirm you just

4:33

came here from the pentagon i did you

4:35

work for a four star general or

4:37

equivalent and the equivalent that same amazing

4:40

screen the military job is

4:42

so fancy an important that comes with this catalogue

4:44

mandatory disclosure

4:45

nothing that i say here today necessarily

4:48

represent the opinions of

4:50

, department defense i'm here

4:52

my

4:52

personal capacity i'm

4:55

in part as a hacker before nina

4:57

was a cyber warfare nerd in the pentagon

4:59

she was what's called a white hat hacker

5:02

that is a person who looks for vulnerabilities

5:04

on the internet and fixes them before

5:06

the bad guys can exploit them so to

5:08

nina this awesomely free nespresso

5:11

machines sitting on our counter it's seems

5:13

less likely lucky accident and more like a

5:15

tell sign that something was

5:17

not right the nina starts her detective

5:19

work like any grizzled hacker would

5:22

right submitting a ticket to e bay's customer

5:24

service portal but she knows that's

5:26

not going to do much so i call nespresso

5:29

the and it

5:31

is almost impossible to

5:33

explain to them as philly

5:37

if she lays out the whole situation how she

5:39

ordered some coffee pods on ebay the package

5:41

came from nespresso the extra coffee machine

5:43

and the customer service reps like yeah i can look at

5:46

that yeah know everything was good

5:48

everything's paid for

5:49

you got this espresso

5:51

machine and this coffee nina knows

5:54

that she made her order on e bay the

5:56

nespresso rep is telling her that they have an

5:58

order in their says

5:59

them in her name

6:01

they're both the coffee pods and the machine

6:04

what we paid for at full price

6:06

i said oh so

6:10

problem one is i didn't buy it from you

6:12

i bought it on ebay and yet

6:14

you sent it to me and

6:17

so scary kind about it righteous

6:19

is no no no everything is fine and

6:22

at this point this

6:23

in my inner something is wrong on the internet

6:26

starts stuff

6:26

the recent everything's not fine i

6:29

not only have not paid the amount of money that's

6:31

listed on the invoice

6:34

i am only paid for roughly

6:36

a third of the value of any of this means

6:39

keeps trying to the situation is

6:41

confusing enough that she can not get

6:43

it across to the customer service rep see

6:45

or here's i want to send us back somehow

6:48

or ever got my order and i'm saying i

6:51

have an orders such as it's a lunch the me

6:53

how do i give it back to you

6:55

okay but it doesn't fit in the

6:57

decision tree of the call center

6:59

not fit and it's in in so i'm

7:01

on hold

7:02

the hold please a somebody here

7:04

is complaining about getting too

7:06

much sir

7:07

exactly

7:08

nina realizes there is a nother bit

7:10

of information that could be used and

7:13

i said will hold on a second can

7:15

you

7:16

maybe just confirms him

7:17

the the credit card that was charged

7:20

the customer service rep is like well i can't

7:22

give you the number but i can give you the

7:24

name in fact it's probably

7:26

right there on there invoice you got with the packages

7:29

mina lox sure enough there's a name

7:32

we'll call him george from poughkeepsie

7:34

nina gets off the phone and sinks through what

7:37

she's got

7:38

okay i ordered coffee pods

7:40

from some generic seller on e

7:42

bay but the shipment i got came

7:44

directly from the suppressor

7:47

they caught up in a spread so my name was

7:49

in their system

7:50

they don't have my credit card on file

7:53

their this guy george and poughkeepsie's credit card

7:56

so is george running some

7:58

sort of scheme

7:59

he caught up in something much bigger

8:03

the answer those questions nina is gonna

8:05

have to do some digging first up

8:07

she needs to establish a pattern he

8:10

orders again and george pays then

8:12

he is the primary suspect but

8:14

if it comes from a different cardholder data

8:17

in georgia is probably just a bit player she

8:19

looks on ebay and there are a ton of listings

8:21

for discount

8:23

very similar postings but from different sellers

8:25

i start doing all the data capture

8:28

i can occur every step of the ways

8:30

you matches allergies i may spread

8:32

see so i love it alone

8:34

i set up an automated search on e

8:36

bay to a coordinated to try neck

8:38

down

8:39

have to sell and capsules on e bay

8:42

in a perfectly legitimately frankly

8:45

i

8:46

try to knock it down to

8:49

indicators of fraud so

8:51

way too cheap brand new accounts

8:54

no established history of

8:57

successful sale pretty quickly she

8:59

about fifty listings like that just

9:01

like her first purchase a sampler pack

9:03

of nespresso pods at half the usual

9:06

price she picks to and buys

9:08

the for science and for reason

9:11

for , you got a

9:13

sweet got a on some

9:15

espresso pot says correct guy

9:17

i am and meanwhile i'm taking

9:20

screenshots and snapshots in

9:22

recording all of my transaction

9:24

when the first bus arrives sure

9:26

enough just like the first time it comes

9:28

straight from espresso and again

9:30

there's a freebie this time a really

9:32

nice milk for author said a whole home the

9:34

least a set at this point she

9:36

looks at the packing slip for who paid and it

9:38

is not doors from poughkeepsie he seems

9:41

to be off the have them to get

9:43

some x box in the mail also

9:45

from nespresso also

9:47

not paid for by george this

9:50

time there's double the coffee that she ordered

9:52

so there is definitely a pattern here

9:55

yes nina it is going to a

9:57

lot of effort to try to unmask scam that

9:59

so far

9:59

the only benefiting from

10:01

i remember she slamming like

10:03

six cups of nespresso day and

10:06

with each order she's getting closer and

10:08

closer to an answer i had

10:10

to make another to sell purchase okay and when

10:12

i did that the coolest thing happen

10:14

yeah the , couldn't

10:16

facility order and

10:19

decides to write me

10:21

the notes and see if i have this

10:25

he says hello

10:27

friends which was either

10:28

the very kind thing the same share

10:30

first

10:31

thanks a lot because you choose my list and to buy

10:34

then it says my

10:36

mom has sick on hospital now so

10:39

, can find any other item in

10:41

best condition to sippy you and i

10:43

have to go to the hospital with her now so i hope

10:45

that you can understand for me and let me

10:47

cancel odor thank

10:49

you and god bless you

10:51

the know it back says really sorry

10:53

to hear that about your mom

10:55

the response in a county shut down

10:57

a few days later and this letter does

10:59

have all the telltale signs of an internet

11:01

grasped the grammatical mistakes the

11:03

tragic tale but remember

11:06

so far nothing bad has happened to nina

11:08

she's gotten some free stuff and crates

11:11

albeit heartbreaking customer service

11:13

those things the freebies the letter the

11:16

he knows they must be clues clues

11:19

to how the scam works isn't a scam

11:21

is come on it is definitely a scab

11:24

okay , skin but then who

11:26

is making the money and

11:28

who exactly is getting hurt hurt

11:31

coming up after the break

11:40

fundamentally the case of the extra an

11:42

espresso machine is a credit card

11:44

skin the way to turn stolen credit

11:46

card numbers into clean money and fraudsters

11:49

bank account all while everyone

11:51

who's drawn into the scam feels like

11:54

they're coming out ahead to explain how works

11:56

we're gonna need some reinforcements so

11:58

we called up a kind of history in of internet fraud

12:01

his name is patrick mckenzie

12:03

but i i i try to stay anonymous assets

12:06

in the sketchy back to their that's records

12:08

for stripe a payment processing company

12:11

which mostly means they handle credit card payments

12:13

for online businesses and as part

12:15

of his job patrick lurks around the sketchy

12:18

parts of the internet trying to glean whatever

12:20

he can about fraudsters who deal

12:22

with stolen credit cards he

12:24

says surprisingly their world isn't all

12:26

that different from ours they have our

12:29

forums they have conferences they have starred

12:31

refuse for people who are are better or worse

12:33

actors and ministries it is fascinating

12:36

how are their conferences for fraudsters

12:39

that can't be true oh it

12:41

happens to be true as you can imagine

12:43

this imagine this for by insight only thing so that they

12:45

don't i accidently inside the authorities

12:48

patrick says to figure out what happened

12:50

to nina it's helpful to look at how the

12:52

structure of credit cards gaming has changed

12:54

over the years like every other industry

12:56

the credit card fraud industry has

12:58

a supply chain associated with it and a division

13:01

of labor and met supply chain a division

13:03

of labor like credit card

13:05

fraudsters are specialized

13:07

different people are best at different parts

13:10

of the chain so the person who steals

13:12

your card isn't the person who figures

13:14

out how to get money out of it probably

13:16

that supply chains differentiate between

13:18

tartars and cesars tartars and

13:20

tacis this tartars steel

13:23

payment credentials and casters turn timid

13:25

credentials into money better says nina

13:27

story is a clear case of caching

13:30

people try to make a buck from so and credentials

13:32

mostly credit card numbers and the way

13:34

they make money as seems to a lot

13:36

over the past couple decades mostly

13:39

because there's this ongoing cat and mouse

13:41

game with the cashiers constantly

13:43

trying to stay one step ahead of more

13:46

and more sophisticated fraud detection

13:48

techniques sauber case of

13:50

the extra espresso machine it's helpful to

13:52

know just how he arrived at credit

13:54

cards game so sophisticated that

13:56

on the surface they look like they're benefiting

13:59

everyone they touch though and

14:01

oldest real quick for a journey through the

14:03

evolution of credit card just move

14:05

on alexi let's say it's

14:08

two thousand and three and you and i are living in

14:10

topeka kansas why not exactly

14:13

yes and we decided not

14:15

only are we best buds and roommates obviously

14:17

we are going to become business partners

14:20

embarking on a list of cassie or right

14:22

mice a crime let's go first thing

14:24

we're going to have to do is find ourselves

14:26

some stolen credit card numbers

14:29

which we can buy in bulk of any number

14:31

of sketchy web sites and then we

14:33

get to work way back

14:36

in the day the easiest way to get money

14:38

out of her life credentials was to buy valuable

14:40

things ship them to yourself sell

14:42

them to flea market and then you have money so

14:45

we use our purloined credentials

14:47

to start buying you know the latest

14:49

nokia brick phones and dvd

14:51

players and lincoln park cds

14:54

maybe but this is all brisket

14:56

because all of this stuff is still showing

14:58

up on our doorstep so

15:01

long for spent or industry could realize that's

15:04

it , like we've been spotted four hundred and

15:06

seventy three times by the folks that one two three main

15:08

street right maybe someone should look into that so

15:10

sketchy nick we get out of selling

15:12

are ill begotten goods at flea markets

15:15

or on craig's list and there

15:17

and see is one of our caching career

15:20

time to pivot to face to alexi

15:22

the up help out

15:23

instead of swiping stolen cards at

15:25

other people's doors

15:27

we swipe them at our

15:29

store we have a store we're going to start

15:31

a new business gaffer com que

15:34

as the fraudster one two three main streets could

15:36

sign up for an account to

15:38

do lawn care services yeah we didn't

15:40

we can lawnmower but i've i've worked at

15:42

weed in my day where

15:44

we're going to do is call up call credit card

15:46

processing company and say hey

15:49

would you help our small business planet

15:51

money planet

15:53

during the take credit card payments

15:55

from our customers and when they

15:57

say yes congratulations on your new

15:59

surprise

16:01

they go we take all of our stolen

16:03

credit cards and swipe to our hearts

16:05

content

16:06

oh yeah

16:07

one problem sorry if you as like your business

16:10

have run up one hundred credit cards from south

16:12

africa china nevada new york and

16:14

california while your business a sickly president

16:16

kansas that looks a little bit suspicious

16:18

to those of us an industry also little

16:20

suspicious we bid swiping credit cards

16:23

i mean mowing lawns in the middle

16:25

of the night which is admittedly a pretty

16:27

inconvenient time to move patrick says it's

16:29

not just addresses in times of swipes

16:31

there are a ton of other thing as a fraud

16:33

that the credit card processor is can use

16:35

to find and shut down fraudulent businesses

16:38

like suspicious amounts say

16:40

we were to swipe for twenty over

16:42

and over and over again through tree definitely would

16:46

that would be a problem or say we keep

16:48

swiping cards from the same elite rewards

16:50

program that would be a sign of book fast

16:53

and so ends phase two

16:55

of are cashing career or

16:57

light of crap lasted for now sad

16:59

but it does bring us to the latest

17:02

innovation in credit card caching and

17:04

be exciting conclusion to the case

17:07

of the extra nespresso machine

17:09

named triangulation fraud

17:11

it is far harder to detect than any

17:14

of those previous forms of credit card guessing

17:16

and that's why does the new hotness and fraud circles

17:19

the new hotness triangular

17:21

fraud is what nina

17:23

came across that was that classic example of

17:25

it yes so here finally

17:28

is the big reveal we are going to walk you through

17:31

exactly what was happening with nina

17:33

and the free coffee remember

17:35

when nina went to evade sound those discount

17:38

pods impressed purchase her money

17:40

went to the fraudster the account

17:42

that they had set up on e bay meanwhile

17:45

be fraudster used stolen credit

17:47

card info to make the purchase at an espresso

17:49

website and send mina her order

17:52

plus a little bonus and if the buyer

17:54

had been anyone other than nina

17:56

it would have worked out

17:58

beautifully because the

17:59

about triangulation fraud is that everyone

18:02

in the triangle comes out ahead the

18:05

you know get the great deal on coffee pods e

18:07

bay gets their commission and espresso

18:09

gets a sale

18:10

the when nina tries to sound the alarm when the stress

18:12

or he base they have no idea

18:15

why she's complaining

18:16

everyone doing great it is a brilliant

18:19

the fraudster acts as a secret middleman

18:21

using george from poughkeepsie stolen credit

18:23

card number two by nina exactly

18:26

what she wants while depositing her

18:28

clean money into a bank account somewhere the

18:30

only person is lost out is george and

18:33

that is where the scam starts to unravel

18:35

the fraud will initially be detected by the people

18:37

his credit card sleeves stolen eventually

18:39

george might notice and unfamiliar charge

18:42

but his bank will make him whole

18:44

even george isn't on the hook in the end so

18:47

who does pet

18:49

when i first started working on the story i thought that need

18:51

is coffee and a restaurant espresso maker

18:54

all ultimately got paid for by the banks

18:56

but patch of told me know the

18:58

banks also have a way of passing on the cost

19:00

of the fraud it's called a charge back

19:03

they called the business the made the sale in this case

19:05

nespresso and say hey the

19:07

customer says they didn't author is what happened and

19:10

that the business oh look at the records

19:12

and say well shoot we just got defrauded

19:15

four one ks and distress or pods but this

19:17

is the business we have chosen okay we're gonna

19:19

write that after proboscis go about our merry way

19:22

patrick says this is the final tricky

19:24

detail working in favor of the fraudster

19:27

they're spreading these charge backs across tons

19:29

of different online retailers are

19:31

using stolen credit cards to ship sneakers

19:34

and tote bags and podcast or microphones

19:37

and each time each retailer is losing some

19:39

amount of money but not enough to take

19:42

action take action i think one of

19:44

the reasons that triangular fraud has succeeded so

19:46

much is that it distributes

19:48

the cost of the fraud over a variety

19:50

of different businesses and so

19:52

no individual business and no individual actor

19:55

has both enough of the economic

19:57

skin in the game and the data to

19:59

just

19:59

shut down the fragile operation

20:01

it seems like nina did manage to

20:03

shut down her particular case of triangulation

20:06

fries you compile dollar documentation

20:09

and send it to that the ice and then

20:11

she kept an eye on the email listings few

20:13

months later the discount pods pretty much

20:15

banished from the site

20:17

the funny thing about this whole story is if

20:19

the fraudster had never sent you know that

20:21

extra stuff if they just center the thing

20:23

she ordered she would never have

20:25

gotten suspicious in the first place why

20:28

send that extra coffee machine into

20:31

the things to little bonuses were away to buy

20:33

her love to get good ebay

20:35

reviews to keep are coming back as a customer

20:37

keep their ebay accounts alive though

20:40

it was meant to be abroad that for nina

20:42

it was something else

20:44

the clue

20:45

it's very peculiar type of person

20:47

who's like

20:50

the sees this and is like i

20:52

wanna i wanna know more like

20:55

i feel like i find a deal on the internet i wanna

20:57

know less and i just want to keep getting

20:59

mad deal in are saying it's

21:02

as if most people are very

21:04

happy

21:06

the think that they're a victimless crimes

21:09

if if you're

21:11

getting

21:11

the thing for free on the internet

21:13

the summers paying for it and

21:15

, you know you should know that and

21:17

he said oh probably probably

21:20

think about that who that

21:22

ice knew that makes me feel

21:24

personally attacked yeah

21:29

this , attacked says she doesn't play

21:31

that discount cause again when she

21:33

does three upper coffee pods she

21:35

pays office speaking

21:41

of e-commerce you can get some planet

21:43

money gear at shop at npr

21:45

dot org slash planet money we've

21:47

got half we've got t-shirts but

21:50

please