Online service marketplaces are vulnerable to electronic money laundering, which is also known as "transaction laundering," because there are limited ways for operators to monitor all services and transactions. Fraudsters were using stolen credit cards to launder dirty money through Airbnb hosts they met on underground Russian forums. The hosts would split the payment with the fraudsters and create fake reviews to complete the transaction. Due to the vast scope of Airbnb's operations, it was difficult to detect this illegal activity.
Now, Uber is also facing similar exploitation, but in a more complex manner. Users of a laundering service pay for "ghost rides" that they never actually take, which makes it more difficult to detect fraudulent activity. The sheer volume of transactions on Uber's platform makes it challenging to monitor all of them effectively, and the current tools and processes in place are not enough to prevent transaction laundering.
How Cybercriminals Exploit Uber's Platform
The Uber scam works by using a technique called "ghost rides," which involves fraudulent transactions made by laundering services. These services purchase Uber rides with stolen credit cards and then cancel them shortly after the ride begins. This generates a refund, which is then sent to the laundering service's bank account. The launderer takes a cut of the refund and returns the rest to the criminal who provided the stolen credit card. This allows criminal to convert their stolen funds into legitimate money.
In some cases, the launderers may use fake accounts or hacked accounts to request rides that never actually take place, which makes it even more difficult for Uber to detect fraudulent activity. The sheer volume of transactions on Uber's platform makes it challenging to monitor all of them effectively, and the current tools and processes in place are not enough to prevent transaction laundering. As a result, Uber has been targeted by cybercriminals who use these tactics to launder money.
Uber Ride with Stolen Credit Cards
Among the top crimes involving money laundering is fraud. Even if the scam takes place through cyberspace, thieves must resort to various options to legally show their money. Using Uber is one of these methods. Ziv Mador, who leads the SpiderLabs research team of cybersecurity firm Trustwave, explained that criminals had used such "Gig Economy" applications in recent years to avoid detection of cybercrime.
According to Mador, during this laundering process, scammers invest some of their money on a ride that doesn't really exist, and at the end of the day, the money comes back to them. To explain in more detail, because the Uber driver or employee is hired by a money-laundering person, it makes it look like there is a customer in their vehicle. But such a ride or client is not real. The money on the stolen card appears to have been legitimately earned by giving it to this Uber ride, but it's actually laundered money. Dealing with the drivers in these transactions is not as difficult as expected. Drivers do not feel guilty for not stepping out of what they normally do. But they still regret it after learning about the legal sanctions.
Most money laundering transactions through Uber take place in China. One of the methods used in such overseas transactions is called the "Acupuncture" method. In the acupuncture method, the driver, who deals with financial criminals, collects the money from the stolen credit card through the fake ride and then sends it back to the overseas criminals. The criminals who are sent overseas money in this process are called "nurses."
Apart from China, this method is also very popular in countries such as India and the USA. In 2017, 13 people were arrested in a case in New York. In this case in Manhattan Federal Court, fraudulent driving plans were identified. Since then, the US Law Enforcement Forces have continued to take measures in this regard.
The Similarity of Airbnb and Uber Fraud
Uber isn't the only mobile app that has been laundered by money. Airbnb hosts also sometimes mediate these crimes, as is done through Uber. Criminals collaborating through ads posted on the dark web can masquerade as having non-existent guests in their Airbnb homes and transferring funds to their accounts. In fact, when these funds obtained as a result of financial crime are transferred to the Airbnb account, they become legal. Sometimes, if it is necessary to launder a large amount of money, criminals can make annual deals with money mules who own more than one home. To summarize, just like with Uber, a service in Airbnb appears to be given to a customer who is not there.
According to a report verified by Trustwave, advertisements such as "managers of Airbnb hosts -- I'm looking for people who have real hosts from this company" were published on the dark web in 2018. In addition, after much news was published, Financial Conduct Authority (FCA) started to work on tightening the audit of Airbnb Payments UK (APUK).
How Does Sanction Scanner Help?
Sanction Scanner can help minimize the risks of money laundering through online service marketplaces such as Airbnb and Uber. The solution begins with enhancing customer identity verification processes. Sanction Scanner checks individuals and entities against real-time updated global sanction lists, providing protection against identity theft, fraud, and other financial crimes.
Additionally, Sanction Scanner employs big data analysis, artificial intelligence, and machine learning to monitor transactions and detect suspicious activities. This allows for the identification of unusual patterns and behaviors, such as ghost rides or fake reviews, that may indicate money laundering attempts.