The dark web is home to all sorts of shady characters and nefarious activities. Among those activities is something known as the ‘carding industry’. It is an industry that demands a proactive response from the financial services sector, a response that includes active fraud protection measures.
Carding Industry Basics
The dark web’s carding industry is essentially a sophisticated network of cybercriminals whose activities are focused on the theft, trafficking, and unauthorized use of debit and credit card information. What they do is financially lucrative, which is why they do it.
Data published by Security.org in mid-2024 reveals the following:
- 60% of U.S. cardholders have been victimized by fraud.
- 52 million were victimized in 2023 alone.
- Total losses in 2023 exceeded $5 billion.
- The median fraudulent charge in 2023 was $100.
Alarmingly, 75% of American debit and credit card holders admit to at least one high-risk credit card habit. Such habits open consumers up to credit and debit card fraud perpetrated by sophisticated criminals who know exactly what they are doing.
How the Industry Works
Combatting dark web carding by way of fraud protection strategies begins with understanding how the carding industry works. Industry players start by acquiring card information. They use a variety of means to obtain credit and debit card numbers, CCV codes, and the names and addresses attached to them. Common theft tactics include:
- Phishing scams
- Malware
- Social engineering
- Physical skimming
Once information is obtained, it must be validated. Dark web carders deploy automated bots whose sole function is to validate stolen information by initiating small-scale transactions on a variety of payment sites. The practice is known as both ‘credit card stuffing’ and ‘credential stuffing’.
Bots can easily validate thousands of credit and debit cards in no time and all. Once information is validated, a carder can use it himself or sell it on a dark web marketplace. Whoever ends up with the data can initiate fraudulent transactions across the internet.
Fraud Protection and Its Role in Combating Carding
Consumers are the first line of defense against dark web carding. Anyone who possesses a credit or debit card should make a point of never being careless with it. Consumers should make every effort to protect the information associated with their cards so as to prevent theft. Above and beyond consumer efforts, the financial services industry has a responsibility to engage in fraud protection.
The cornerstone of fraud protection is darknet intelligence. For example, DarkOwl equips fraud protection companies with APIs and data products that allow them to “monitor for PII, CCN and BIN numbers, cryptocurrency wallets, and much more.”
Fraud protection’s primary goal is to identify data breaches as early as possible. In addition, darknet intelligence can monitor chatter in activity suggesting that a new attack is imminent. Proper action can then be taken to mitigate any consequences of said attack.
Also note that fraud protection is not just about minimizing losses among consumers. It’s about protecting financial service companies as well. Credit and debit card issuers lose every time a consumer’s card is compromised. So fraud protection strategies are equally beneficial to card issuers.
Ignoring It Doesn’t Help
The dark web’s carding industry is very real and incredibly successful. Ignoring it does not help anyone. Instead, combating theft, distribution, and unauthorized use of credit and debit card information requires a proactive approach supported by fraud protection strategies.
Consumers doing their part, combined with the financial services industry aggressively pursuing fraud protection, would stop the carding industry in its tracks. Carding would not be nearly as lucrative as it currently is.
