The U.S. Justice Department (DOJ) is intensifying its efforts against networks that exploit consumers through fraudulent microtransactions, effectively concealing their illicit activities from banking institutions. The DOJ recently announced two civil action suits as part of this crackdown.
Principal Deputy Assistant Attorney General Brian M. Boynton, who heads the Justice Department’s Civil Division, said, "These cases mark an important step in the department’s efforts to halt schemes that prey upon individuals and small businesses across the United States." He added, "The department is committed to using all of the tools at its disposal to prevent fraudsters from reaching into victims’ bank accounts and stealing their hard-earned savings."
According to a press release by the DOJ, these two civil cases form part of a broader crackdown led by the Consumer Protection Branch. The aim is to disrupt networks that employ unauthorized charges as a means to siphon money from consumer accounts. These transactions are typically concealed by categorizing them as 'microtransactions' or 'microdebts', which reduce the chargeback rate levied on the fraudulent parties. Chargeback rates refer to transactions that are reversed by the consumer's bank as a protective measure.
The press release further reveals that the two civil suits have been filed against Altitude Processing, Inc., and CB Surety, LLC. The case against Altitude Processing alleges that the company went to great lengths to portray fraudulent companies as legitimate enterprises. The defendants purportedly created counterfeit websites and falsely claimed that these businesses provided online marketing services. By employing numerous sham microtransactions, they managed to evade detection by banks despite a high volume of chargebacks on unauthorized debts.
Similarly, CB Surety processed payments for clients who made unauthorized charges to consumers' accounts and engaged in several illegal activities. Like Altitude Processing, CB Surety also used microtransactions to obscure information from banks and consumers alike. By creating fictitious entities, the defendants were able to infiltrate the banking system, masking their actual activities and giving the false impression of conducting lawful businesses. The U.S. Postal Inspection Service (USPIS) is currently investigating these civil suits.
