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Justice Department Addressing Microtransaction Fraud

The U.S. Department of Justice announced it is filing cases against several fraud rings that use so-called microtransactions to mask their fraudulent activity from victims and card issuers. The lawsuits are being brought as part of efforts by the Justice Department’s Consumer Protection Branch to stop criminals that use misrepresentations or unauthorized charges to steal money from consumers’ financial accounts.

Microtransaction scams involve the use of low-dollar transactions made with stolen credit or debit cards. By mixing in fraudulent microtransactions (which often go unnoticed by the cardholder or are automatically reimbursed by card issuers if disputed) with fraudulent transactions that have higher dollar values, criminals can lower the percentage of fraudulent transactions that get flagged as a chargeback.

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