Street thieves who specialize in cashing out stolen credit and debit cards increasingly are hedging their chances of getting caught carrying multiple counterfeit cards by relying on Fuze Cards, a smartcard technology that allows users to store dozens of cards on a single device, the U.S. Secret Service warns.
Launched in May 2017, the Fuze Card is a data storage device that looks like a regular credit card but can hold account data for up to 30 credit cards. The Fuze Card displays no credit card number on either side, instead relying on a small display screen on the front that cardholders can use to change which stored card is to be used to complete a transaction.
After the user chooses the card data to be used, the card data is made available in the dynamic magnetic stripe on the back of the card or via the embedded smart chip. Fuze cards also can be used at ATMs to withdraw funds.
An internal memo the U.S. Secret Service shared with financial industry partners states that Secret Service field offices in New York and St. Louis are currently working criminal investigations where Fuze Cards have been used by fraud rings.
The memo, a copy of which was obtained by KrebsOnSecurity, states that card theft rings are using Fuze Cards to avoid raising suspicions that may arise when shuffling through multiple counterfeit cards at the register.
“The transaction may also appear as a declined transaction but the fraudster, with the push of a button, is changing the card numbers being used,” the memo notes.
Fraud rings often will purchase data on thousands of credit and debit cards stolen from hacked point-of-sale devices or obtained via physical card skimmers. The data can be encoded onto any card with a magnetic stripe, and then used to buy high-priced items at retail outlets — or to withdrawn funds from ATMs (if the fraudsters also have the cardholder’s PIN).
But getting caught holding dozens of counterfeit or stolen cards is tough to explain to authorities. Hence, the allure of the Fuze Card, which may appear to the casual observer to be just another credit card in one’s wallet.
“While this smart card technology makes up a small portion of fraudulent credit cards currently, investigators should be aware of the potential for significant increases in fraud loss amounts with the emergence of this smart card technology,” the Secret Service memo concludes.
Fuze Card did not respond to requests for comment.
In many ways, it is unsurprising that thieves are turning to this new technology to perpetrate credit card fraud, which is something of a constant cat-and-mouse game that employs ever-changing techniques. For evidence of this, one need only look to the constant innovations that fraudsters come up with to deploy physical card skimmers at ATMs and retail checkout lanes.
No doubt, fraudsters engaged in money laundering via virtual currencies like bitcoin will be doubly interested in Fuze Cards in the coming months. Fuze Card says that later this year it plans to launch FuzeX, which contains the same amenities of the Fuze Card and will allow users to conduct purchases using virtual currencies.