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Friday, August 22, 2008

Scammers scammed

American Scofflaw

They say there’s no honor among thieves. This is also true of

the shadow economy. Fraud and rip-offs are so common that a

system of guarantors and escrow accounts has emerged. For

example, a drop service provider might offer a guarantee to an

identity thief that they will be paid their cut of the sale of any

goods, even if individual fences don’t pay up.


Similarly, guarantors will provide an escrow service. For example,

a buyer will transfer payment to the guarantor and the seller will

transmit the virus code or the credit card numbers.


If the goods check out the funds are released. Typically, these

guarantors take 2-3% of the transaction value for

their services. The emergence of these services

shows a developing sophistication in the market,

driven by economics more than technology or

the demands of organized crime. It also shows

there are participants who value their long-term reputation.

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