Data Breaches: What the Underground World of “Carding” Reveals

This article first provides a brief background on large scale data breaches and the criminal “carding” organizations that are responsible for exploiting the stolen data. Second, the article provides an in-depth examination of the process by which large volumes of data are stolen, resold, and ultimately used by criminals to commit financial fraud in the underground carding world. Third, this article discusses how carding activity is linked to other crimes, including terrorism and potentially drug trafficking. Fourth, this article outlines several recent investigations and prosecutions of carding organizations and the individual carders themselves. Fifth, this article examines the responses by the credit card industry and state legislatures to the recent increase in reported data breaches. Finally, this article outlines several recommendations to enhance the government’s ability to continue to successfully prosecute carders and carding organizations.