UK Gang Caught After $750K Online Music Fraud Scam

LSDelirious writes "10 individuals in the UK have been arrested in connection with an online fraud gang, whereby the group created several songs, had the songs uploaded to iTunes and Amazon, then used thousands of stolen credit cards to repeatedly purchase the songs from these services. It is estimated that they charged approximately $750,000 worth of fraudulent purchases, netting the group over $300,000 in royalties payments."

Re:Were the songs any good?

[Anenome]

They were all third rate covers of "Money, money, money, money!"

Re:So...

[mike2R]

Hmm, I'd have thought quite the reverse. iTunes and Amazon are the merchants here as I understand it; they've charged the cards and hold the funds. Presumably they have then paid out commission to these crooks for the "sales".

So now that the fraud has been spotted, the card holders will obviously do chargebacks, and since they obviously had no part in these transactions their card issuers will refund them, same as for any other fraudulent use of a card.

And as for any other chargeback, the banks will simply recover the money from the merchant, who as always bears 100% of the losses (plus transaction fees probably).

So as I see it: Apple and Amazon lose the money, and are out not only their profit, but the commissions paid to the crooks, and any other costs they have incurred as a part of these transactions. They will presumably attempt to recover what they can during these thieves prosecution.

The victims of card fraud are not the card holders (as long as they spot the fraudulent transaction), but whatever poor sod charged the cards and is now out the goods/services they provided.