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Physical Address Mirroring

Address Mirroring | Business Identity Theft

Physical Address Mirroring

A new twist on the old Business Bust-Out scheme

Business%20identity%20thieves%20mirror%20the%20physical%20address%20of%20a%20business%20to%20obtain%20credit%2C%20loans%2C%20cash%2C%20and%20goods%20and%20services%20in%20the%20business'%20name. Bookmark and Share

Address mirroring scam

Determined criminals will often go to great lengths to perpetrate their scams. In a popular business identity theft scheme known as address mirroring (a twist on the traditional "business bust-out" credit scam), business identity thieves closely mirror the physical address of the unsuspecting target business in order to obtain credit, loans, cash advances, and goods and services in the victim business' name.

If the thieves can avoid detection or arousing suspicion by their activities, this tactic can be surprisingly simple and effective in a very short period of time.

How the scam works:


Step 1:  Identify a suitable location & target company

This scam is most often used in a multi-floor office building or large business complex with many business tenants. Multiple floors or buildings and large numbers of occupying businesses reduce the likelihood that the thieves' activities will attract attention.


Step 2:  Obtain business credit reports or other useful information on the target company

Thieves may attempt to gain information about the company's finances, credit, suppliers, owners and officers, and general business activities in order to reduce the chances of raising suspicion and maximize their illegal gains.


Step 3:  Rent office space in the same building as the target company

Using bogus information and funds or stolen credit cards obtained through previous criminal activity, the thieves rent or lease space in the same building - usually on another floor or in a low traffic area of the building or complex. They keep a low profile, typically with no business signs or other indicators of their business activities, although they may move some minimal office furniture in simply to avoid raising suspicion. If one of their group remains at the location during business hours, it is most often a low level member whose job is to merely to keep up appearances and accept the deliveries.


Step 4:  Apply for credit and loans or purchase goods in the victim business’ name... or both

Once the new "office" is set up,  the thieves quickly get to work. Depending on the nature of the scam, they may either:  a). apply for credit cards, loans, and lines of credit in the business' name which they will promptly max out through purchases and cash advances; or  b). begin ordering products and services in the name of their target business, with any company that accepts purchase orders, offers invoicing, or payment terms being a potential source of goods. Either way, as quickly as possible, credit is maxed and orders are placed for high value items that are fast and easy to sell. Expedited shipping or delivery is necessary because the thieves won't stay in this location for long, and extra shipping costs are not a concern because the thieves have no intention of paying the bill anyway.


Step 5:  Disappear with the proceeds and find the next victim

As soon as the thieves have racked up tens of thousands of dollars in fraudulent purchases, have maxed out available credit, or they have begun to raise suspicion, it is time to pack up and disappear. In 30 to 90 days, the business that the thieves were impersonating at that location will begin to receive telephone calls and correspondence from creditors seeking payment, and must prove that they did not order or receive the goods that were actually delivered to their physical location. Depending upon the severity of the fraud, it may take months or years to fully unravel and resolve.

 

Why it works:

Thieves use address mirroring to take advantage of weak or ineffective transaction and application review processes; and, to exploit weaknesses in address-based verification, authentication, and fraud detection systems.

"Exact Match"

Address-based verification programs generally consider it an "exact match" when the customer's street address (line 1) and zip code provided at the time of the transaction match the information on record.  In other words, these systems may disregard address line 2, such as a suite number, building number, etc.

As you can see in the two examples below, merchants are often advised by their credit card processors that if an exact match occurs (address line 1 and the zip code), then it is safe to complete the transaction. However, if the transaction later turns out to be fraudulent, the business may still suffer the combined loss of both goods and revenue, with little hope of recovery. A very large fraudulent order of this nature can have a significant negative impact on a business.



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Address Mirroring

Business identity theft can strike any business

One Sacramento law firm discovered firsthand how quickly and efficiently business identity thieves can strike after criminals quietly moved into the same office building under the law firm's name. Within weeks, the thieves ordered over $70,000 worth of computers and office furniture in the firm's name, hired a moving truck, and quickly disappeared - leaving the firm to deal with creditors and the mess.

Spielberg, Greg T. "Taking On Small-Business Identity Theft," Businessweek.com, July 9, 2009

Address exact match code and explanation

Merchant instructions for address "exact match"

Exact match guidance
Consider this: 
If you ignored address line 2, how would you know which of these is the legitimate business before you shipped goods or extended credit?

ABC Company
1100 42nd Street SW
Anytown, Florida   54321

ABC Company
1100 42nd Street SW
Suite 107
Anytown, Florida   54321

ABC Company
1100 42nd Street SW
Building 1 - Suite 300
Anytown, Florida   54321

ABC Company
1100 42nd Street SW
4th Floor, #412
Anytown, Florida   54321

Learn how to protect your business from business identity theft

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Article written and ©Copyright by Michael Barnett. All rights reserved. Published with permission. 

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