How Are Stolen Credit Card Numbers Used?

Stolen credit card numbers, including the card number, expiration date, and security code, are valuable data for illicit activities. Even if the physical card remains with its owner, this numerical data allows criminals to exploit accounts without needing the plastic itself.

Online Purchases and Digital Services

Stolen credit card numbers are frequently used for online transactions, where the physical card is not required. Criminals purchase goods from e-commerce websites, often targeting high-value items like electronics or luxury products for resale. These are “card-not-present” (CNP) transactions.

Beyond physical merchandise, stolen numbers acquire digital goods, services, or subscriptions. This includes streaming service subscriptions, software licenses, and online gaming credits. Digital delivery makes these targets attractive for fraud, as they do not require physical shipping.

Criminals use stolen credit card information to fund digital wallets or accounts, such as those associated with PayPal or Venmo. Once loaded, these wallets can be used for further transactions, or funds may be transferred to other accounts, laundering money. Fraudsters may use these wallets for purchases or to send money, even if the original card is canceled.

To bypass security measures, criminals employ various tactics. They may use different shipping addresses for online purchases to avoid detection, or utilize bot networks for rapid, high-volume transactions. Some fraudsters attempt to circumvent authentication protocols, such as 3D Secure, through social engineering or by exploiting system vulnerabilities.

Physical Purchases with Cloned Cards

Stolen credit card numbers can be transformed into physical cards for in-person transactions, a process called “cloning” or “skimming.” This involves encoding stolen card data onto blank plastic cards or re-encoding existing magnetic stripes. Specialized equipment allows criminals to write the stolen numbers, expiration dates, and security codes onto these counterfeit cards.

Cloned cards are used for purchases in brick-and-mortar stores, swiped through point-of-sale terminals. Though less common due to the absence of a PIN, these cards may be attempted for cash advances at ATMs. Their effectiveness depends on merchant security measures and reliance on magnetic stripe readers over EMV chip technology.

Criminals target goods in physical stores that are easy to resell for cash. Common items include high-value electronics, designer apparel, and gift cards. Gift cards are favored because they are anonymous and can be used like cash, making illicit funds harder to trace.

Other Forms of Financial Exploitation

Beyond direct purchases, stolen credit card numbers are exploited through other financial schemes. One method is gift card laundering, where criminals use compromised card numbers to purchase numerous physical and digital gift cards. These can then be sold online at a discount or used to buy goods, converting stolen credit into a less traceable currency.

Stolen card numbers may also pay utility bills, phone bills, or other recurring expenses for criminals or others. This allows them to receive services without using their own funds. Fraudsters might attempt account takeovers using stolen card information to gain access to existing accounts.

Peer-to-Peer (P2P) transfer applications, such as Zelle or Cash App, are another avenue for exploitation. Criminals link stolen credit card numbers to these apps to transfer funds to mule accounts, which are quickly disbursed to obscure the money’s origin. Transfers are often executed rapidly to avoid detection by financial institutions.

Stolen credit card numbers are sometimes used for small, untraceable donations to non-profit organizations or charities. This method tests the validity of stolen card numbers with minimal risk, as smaller transactions attract less scrutiny from fraud detection systems.