WASHINGTON–Street thieves who typically specialize in cashing out stolen credit and debit cards are now hedging their chances against being caught by carrying multiple counterfeit cards by relying on Fuze Cards, a smartcard technology that allows users to store dozens of cards on a single device, according to a warning by
the U.S. Secret Service and as first reported by Brian Krebs on his blog, KrebsOnSecurity.com.
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, noted Krebs. 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.
Krebs explained that 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.
Warning from Secret Service
On his website, Krebs reported an internal memo the U.S. Secret Service shared with financial industry partners states 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, according to Krebs.
Krebs noted fraud rings often purchase data on thousands of credit and debit cards stolen from hacked POS devices or via skimmers, with that data then encoded onto any card with a magnetic stripe, and then used to buy high-priced items at retail outlets — or to withdraw funds from ATMs (if the fraudsters also have the cardholder’s PIN).
‘Tough to Explain, So…’
“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,” said Krebs
The Secret Service memo concludes, “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.”