How Does This Scam Work?

At 8:24 this morning (Sunday May 10), an email landed in my inbox, thanking me for my order for $5.69 worth of "Revatrol" at Renaissance Health Publishing.

By sheer good luck I was looking at my email while waiting for my wife to get ready to leave the house. "What?!?" said I, "I didn't order anything like that!"

I started poking around trying to find out about it when another email appeared, and another:

• 8:24, "Your credit card has been charged $5.95... In 30 days (and every 30 days thereafter), we'll send you 1 more month's supply and charge $36.95."
  
• 8:25, $3.78 to http://www.dermasatin.com
• 8:25, $5.95 to http://www.freepowercleanse.com/
• 8:25, $4.95 to www.Caracol-Cream.com
• 8:56 (but arrived at 8:30), Rachel Ryan thanks me for $49.95 to http://www.stay-home-millionaire.com
• 8:30, $10.95 to www.aminogenesis.com
  
• 8:31, $4.95 to www.rez-ultra.com
• 8:33, $49.95 to http://www.automated-wealth-system.com
• 8:44 (but arrived around 8:33), an unspecified amount for an ebay starter kit to esellerslounge.com
• 8:34, for $9.95 I am now a customer of IQ Derma at glow.com
• 8:40, I've spent $5.95 for NU U products at skinnyboost.com.

Many of these emails had my correct name and shipping address and home phone number! Around 8:26 I had totally freaked, yelled at Marian, who went to her computer and logged in to both credit card accounts and said none of these transactions had shown up yet. "Probably just spam," she thought.

The transactions all said they were charging to a credit card but didn't say what the card number was. I called Chase customer service on our more important card, the one we do not use online ever, and got a run-around, no help at all except that I could start a $7.99/month security alert and when my "welcome kit" arrived in "one to two weeks," it would have a security alert form on which I could check off the kinds of transactions to watch out for, and send it back. Thank you soooo much for your prompt service, Chase.

However, the last, 8:40 am transaction had what none of the preceding emails contained: the last four digits of the card number! That told me that the card involved was the one we use for online transactions. I called Citi and was immediately connected to the fraud line, where "Brian" was very helpful. He checked the account and read the last two transactions which were also small amounts for junk healthcare products -- but not one of the ones we'd had emails for.

Citi was happy to cancel the card, expedite shipping of a new one, and took note that no transactions in the last 24 hours were valid. I urged him to go further, clearly the scammers were at work right now and maybe could be traced? He was vague about that. Anyway, that was that; but tons of questions remain.

All the product websites that I checked look legit (junk products, but legit merchants) and the two whose phone numbers I dialed had phone menu systems ("please listen closely as our menu has recently changed"!). So, the big question, how is the scam supposed to work?

Are the various e-tailers all phony shell companies? Is the idea to make a bunch of charges under $10, collect from the card company, and vanish?

Maybe, but if the companies are phonies set up for this scam, then why make the simulation so elaborate? And above all, why go to the length of sending acknowledgement emails, which alert the victim to the fake charges even while they are happening?

But if the companies are real, then who benefits from this flurry of fake charges? Assuming my card was not the only one being hit this morning, real merchants are going to be hit with a shit-storm of complaints, and many if not all of the fraudulent charges will eventually be cancelled by the credit card companies. Real merchants would suffer almost as much pain as the victims.

In short, how was this scam supposed to work?

Monday update: there's been a sharp up-tick in the amount of spam I'm getting; fortunately Google mail filters it all. However, two more order-acknowledgement emails came in this morning,

• Consumersdicountrx.com -- unknown amount, but I've joined their "best buy affiliate family."
• Ultra Green Products (http://ultragreenproducts.com/).

The latter had a "confirmation number" and a customer service number which I called, and immediately reached a very pleasant rep who seemed sincerely dismayed to hear that the order was fraudulent. It was for a small amount, she said, $5.69, and had already been processed. I told her the credit card company would be taking that back as fraudulent.

The point here is, Ultra Green looks and acts like a legitimate business, not a front or a shell. At least, if it's a front, they've gone to a great deal of trouble to simulate a real business.