Home > Identity Theft and Scams > Identity Thieves Take a Bite Out of Apple

Comments 0 Comments
Advertiser Disclosure


By Raul Vargas

Identity Thieves Take a Bite Out of AppleScammers have found a way to exploit a product financing offer at Apple that issues instant credit for online purchases.

Identity Theft 911, a provider of identity theft resolution services, has received nearly two dozen consumer complaints related to unauthorized purchases made through the online Apple Store by way of an offer to provide instant financing through Barclaycard.

The crime is relatively simple to carry out. All the scammers need are a victim’s name, birth date, address, Social Security number, employer and email address, which are the basic types of information commonly exposed in consumer data breaches.

With this information in hand, the perpetrators go to the online Apple Store, select the items they wish to purchase, and choose an option to receive six-, 12- or 18-month special financing, which redirects them to an application for a Barclaycard-branded Visa.

[Credit Check Tool: Monitor your credit score and activity for free with Credit.com]

Free Credit Check ToolAfter filling in the victim’s personal information, they are notified if they qualify for instant credit approval. If the application is accepted, the perpetrator is returned to the Apple Store where the credit card information is automatically populated, and they are allowed to complete the transaction with the option to have the items shipped immediately.

The process raises several questions, the first of which is exactly how Barclaycard determines if an applicant is qualified for instant credit approval online. It is assumed that the information in the application is cross-checked for validity with credit reporting bureaus or some similar source, and that the address provided in the credit request would need to correspond to the supposed applicant, but representatives at Barclaycard declined to comment on the process.

The next question: Exactly how are the criminals able to have the items shipped to the address of their choosing, assuming it’s not the same one provided on the credit card application? Identity Theft 911 fraud investigator Vicki Volkert, who is looking further into the unauthorized purchase complaints, said it is most likely that the perpetrators are able to enter a shipping address that differs from the victim’s real address when they are completing the purchase order on the Apple Store website.

“We know that our victims are being billed for the items at their home address, and that the product is being shipped to an address controlled by the thief,” Volkert explained. “Online shopping outlets let you input a billing address and alternative shipping addresses, so the thieves could possibly have the product sent to an alternate address, or simply choose to pick it up at a bricks-and-mortar Apple Store.”

Representatives at Apple were contacted and asked to provide details of the purchasing process, specifically if customers are allowed to enter a different shipping address than the one provided for billing in the Barclaycard application.

[Featured Products: Research and compare Identity theft protection plans at Credit.com]

An Apple customer service specialist said that if the purchase was for an iPhone in conjunction with an upgrade offered at a discount for a customer under contract with a specific mobile carrier, the product is required to be sent to the billing address on file with the service provider. Aside from that, they said that they did not know if other products would be subject to similar stipulations. The media relations office at Apple’s corporate headquarters declined to comment on the matter.

So far, it appears that the scammers are targeting high-dollar items in the operation, with the average cost of the fraudulent purchases ranging between $3,000 and $5,000. By the time victims become aware of the fraudulent purchases made in their name, it’s already too late.

The Barclaycard FAQ (frequently asked questions) webpage for the Apple product financing option indicates that some applications for credit may be flagged prior to approval, and that the applicant will be required to go through a secondary verification process. The problem is that Barclaycard does not contact the applicant, but instead provides a phone number for the applicant to call.

Depending on the questions the applicant is required to answer, this secondary validation may prevent some scammers from successfully obtaining credit in the victim’s name. But given that Barclaycard does not directly contact the applicant with the information provided on the credit application form, it is still possible for the identity thieves to complete the process and receive approval.

If Barclaycard would implement a secondary validation with a direct call using the contact information provided on the application, it is likely that the potential for abuse of the instant financing offer could be diminished.

Alternatively, if Apple required that the shipping address be the same as the billing address provided in the Barclaycard credit application, and the information is, in fact, being cross-referenced by Barclaycard with a reliable source, the opportunity to commit fraudulent transactions could similarly be lessened.

This article originally appeared on Identity Theft 911 blog.

Image: Patrick McFall, via Flickr

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team