Merchant911 - Fraud Prevention for Merchants

According to a document released by the New Hampshire Department of Justice Wells Fargo suffered potential compromise of 24 Social Security numbers and mortgage loan account numbers. That’s not a large number in the big scheme of things - unless you are one of those 24.

Merchant911 was recently involved in an investigation that indicates there was an internal breach somewhere in the Wells Fargo organization. If what we found out is true, up to 125,000 credit cards were compromised. I haven’t seen this one reported anywhere.

What we know

A Merchant911 member, known to be a very reliable source, reported chargebacks on 197 transactions amounting to USD $5,000. All transactions were fully approved with AVS, CVV2 and the rest. When the chargebacks started coming in, our member did some investigating. All 197 transactions were made with Wells Fargo cards and all came from one of two IP number blocks belonging to Wells Fargo. One of those numbers traced back to a Wells Fargo firewall.

The member reported the information to Wells Fargo and ended up speaking with the VP of Financial Crimes. He also got at least one follow-up phone call asking for more information and confirming that the IP addresses were internal and at least one was a firewall. Wells Fargo, of course, denied that this was an inside job. How could it not be if the transactions were coming from behind their firewall?

While all this was going on, Merchant911 was also following a blog thread on Consumerist where an individual was alleging that he had knowledge of in internal breach of as many as 125,000 Wells Fargo credit card accounts. His was one of those cards and he was given the information by a Wells Fargo official. We were not able to confirm this nor were we able to put this alleged breach together with the other.

Persistence Pays Off

In the last week of June, our Merchant911 member got hit with yet another fraudulent purchase but the vigilant cardholder saw the transaction online and immediately reported it to the merchant. Based on that report, our merchant contacted law enforcement and surveillance was set up at the delivery point. One person was arrested and, not surprisingly, it was a Wells Fargo employee.

It remains to be seen whether these three events are related. We may never know.