Credit Card Fraud and Online Games.

Further to my previous post on rumoured FBI plans to data mine online game World of Warcraft, in an unrelated incident “.net” magazine and “the register” have recently reported that UK Banks the Halifax and Royal Bank of Scotland have started blocking Visa and Master Card payments to game publisher Blizzard Entertainment.

Following an increase in the number of fraudulent card payments for world of war craft game subscriptions, the bank has set the default action for these payments to block. This does not affect existing account holders, and legitimate card holders can contact the bank and have their account overridden to allow these transactions if desired. The banks have stated that they do not believe that publisher Blizzard Entertainment are at all involved in these fraudulent transactions but due to the nature of the type of transaction there is a great enough security risk to justify their action.

This is not the first credit card problem that Blizzard Entertainment have had to content with. In 2005, many World of War Craft customers received statements stating that the 8.99 charge was being made by the Croyden Park Hotel, Croyden or Swallow St. George Hotel, Harrogte, after card processing company Euro Conex based in Dublin, Ireland made a processing error on the payments.

Interestingly World of War Craft, actually offer their own credit card scheme in the US, that allows users to earn game time at 1% of every dollar purchased.

This kind of credit card fraud is very popular, because it is relatively difficult to trace. It is  comparatively easy of set up an account with a false name and address, but comparatively hard to trace an account back through an isp to a phycial address or person. It’s a card not present transaction not requiring a pin number, there are no phyisical goods are being delivered, so there is no delivery address to trace back to, making it much easier for stolen cards or card details to be used.

According to industry organisation APACS, the numer of card not present card frauds affecting UK gambling sites rose by #12.7 million in the first half of 2007, It is estimated that mail order websites suffered 13 million pounds worth of fraudulent transactions in 2007. Many of which come from overseas transactions.

Credit Card Fraud and Online Games.