ITunes Scammers Raked In Hundreds Of Thousands Using Stolen Credit Cards

In an elaborate scheme that ran from January 2008 to June 2009, a group of 11 scammers raked in hundreds of thousands of dollars by purchasing their own music on iTunes and Amazon and collecting on the royalties, costing the companies somewhere between £750,000 and £1m, or $1.2 to $1.6 million.

The Telegraph reported on March 21 that the scammers, led by one Craig Anderson, 24, uploaded their music onto iTunes and Amazon through third-party digital music distributors like TuneCore, CD Baby, and SongCast.

According to the BBC, the scam gang then attempted to keep their hustle under wraps by limiting each of their downloaded purchases to £10, or about $16, which they made with stolen credit card information on 24 identical laptops.

In addition, they tried to conceal where their downloads were coming from with software called "Hide My IP," writes The Telegraph.

Despite these precautions, Denver White (also known as DJ Denver), 26, one of the musicians commissioned by the scam gang to take part in the swindle, was the reason the whole thing came crashing down.

According to Digital Trends, 20 or more tracks from White, fellow musician James Batchelor (also known as ReggiMental) and other virtually unknown artists were racking up so many downloads that it caught an eye at iTunes.

"Somebody at iTunes noticed that a complete unknown from Wolverhampton called DJ Denver, also known as Denver White, operating entirely on his own, rather than through a record company and without any marketing that anybody could see, was selling so much on iTunes that his name featured in the volume sales charts," said prosecutor Helen Malcolm, as reported by The Telegraph. "He was selling so much and earning so much in the way of royalties he was selling at a rate you would expect from the likes of Madonna."

After the fraud had been revealed and the credit card accounts connected to the royalty payments had been frozen, The Daily Mail reported that Craig Anderson contacted TuneCore about his money -- and it was then that Anderson, White, and the rest were found out and brought in.

The Express and Star reported on March 28 that White claimed he was tricked by the group's leader and has since been cleared of charges of conspiracy to defraud.

The rest of the scam gang, however, was not so lucky. According to the BBC, Anderson's jail sentence of four year and 8 months was handed out last April, but due to a court order could not be reported until now. The other nine conspirators received different sentences ranging from community service to a term of two years.

Though this particular criminal group has been caught and charged, iTunes's problems with scammers is far from finished. A recent investigation published by The Global Mail found that many iTunes users have reported hacked or compromised accounts, leaving the victims with empty gift cards, random PayPal charges and no more store credit.

What are your thoughts on iTunes scammers? Let us know in the comments.

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Comments

[mairs]

01:46 PM on 03/31/2012

This person just hacked my itunes/Apple store account and bought three iPods with a third party credit card. They bought them one at a time, I guess to feel out what the credit limit was on the card.

Pham Hung
991 horby st Suite 205
Vancouver BC V6Z 1V3

Apple is investigating.

[Durt Bagg]

11:56 PM on 03/30/2012

simple... don't use a password like "password" or "12345" -- most of those who got ripped off had too EZ passwords.

[Ashton Johnson]

11:34 PM on 03/30/2012

I lost about $88 because somehow someone across the world (time stamp of purchases was several hours in the future) charged some songs and Apps to my paypal. Thankfully iTunes was very responsive when I emailed their support and I got it all back.

[GrandMaSassy]

08:46 PM on 03/30/2012

My bank account suddenly showed many charges from I tunes that originated in china.

[cestpasvrai]

09:16 PM on 03/30/2012

My credit card did in January. From some iTunes "beijing." Had to cancel my card, file a fraud report, and wait a week for the new card. It sure was a pain.

[Lechiffre]

08:40 AM on 04/02/2012

the ipod and iphones were assembled in china .

[jozie]

06:39 PM on 03/30/2012

My ITunes account got hacked. I was alerted by emailed receipts that started coming in and could see it happening live in my bank account because it was being charged on a debit VISA. After much searching, I found a phone number to contact ITunes directly to have it stopped, since it was going on at the time. I was informed that, because I used ITunes on a PC, not a Mac, they would not help me on the phone and that I would have to contact them by email. I told them that it was happening right then and I wanted my account closed NOW so that it would stop (I was at work and did have access to my account to close it myself). They wouldn't budge. I sent the email and got a response several weeks later with no sort of apology for the fact that it was their breach of security that led to my loss of funds and they were not going to do anything about it, I could take it up with my credit card company. It didn't matter that I owned their device and used their service, and it was on their end that security was compromised, they had no interest in taking responsibility at all. I will never ever buy another Apple product again. I bought a different mp3 player that I love, I have an Android tablet that works great and I have an Android phone that I love.

[Gravenstein]

07:35 PM on 03/30/2012

That's quite a story.
Can you find the three reasons I don't believe it?

[CJ1]

08:55 PM on 03/30/2012

I'd like to know...

[mairs]

02:03 PM on 03/31/2012

I just 1/2 hour ago got off the phone with both iTunes support and Apple Store support because my account was hacked.

Their support number is on each email receipt for one thing. It took me 30 seconds to find it.

I was on the phone with them, AND using a PC. They told me to delete the credit card number information from the account and the hacked billing and shipping info. It took 30 seconds to do that. No one said anything about having to email them because I was on a PC.

They were going to send me on to the next step but I told them it wasn't my credit card on my account that they used, that the person had entered a third party credit card, so that was it. They took my number and said if I needed any further help to please call, and that they may be calling me back if they needed more info. They were very nice and helpful over the phone.

You aren't telling the truth.

[jozie]

05:10 PM on 04/01/2012

I told it exactly as it happened two years ago. Apparently they have changed many policies since then, good for them. There really was no reason to call me a liar.

[Ironsi]

06:22 PM on 03/30/2012

Wall Street did worse. No question asked, no one punished.

[First Blast]

05:38 PM on 03/30/2012

s bags, glad they got caught

[Rick Eriksen]

05:10 PM on 03/30/2012

iThings revenge....

[The Dude67]

04:56 PM on 03/30/2012

Sorry guys, the rape on iTunes only works in one direction.

[WeAlwaysKnewIt]

03:30 PM on 03/30/2012

A better rat trap creates a better rat.

[Mister Grumpy]

02:16 PM on 03/30/2012

As in all things. Greed was their undoing.

[2crudedudes]

03:00 PM on 03/30/2012

Except in Wall Street. You get a bonus for that.

[nicknormal]

01:43 PM on 03/30/2012

OSX is the most secure operating system. iTunes is the OS ignition - can't turn it on without it.

[J0E1]

12:43 PM on 03/30/2012

Impossible.  Apple is infallible.