Terrorists are increasingly turning to credit cards, according to an expert on terrorist financing...

Credit cards serve two key terrorist functions, providing both operational funding and as a means of distributing money to group members. “Credit card exploitation and fraud has become a growth industry for terrorists,” writes IPSA International’s Dennis Lormel in a white paper entitled, “Terrorism and Credit Card Information Theft - Connecting the Dots

Lormel is a managing director with investigative consulting services provider IPSA. According to Lormel: “Credit card information theft and fraud represents a lucrative funding stream for terrorists and consequently poses a serious threat to our national security.”

While Lormel writes that there is no exact data on the amount of credit card use by terrorists, there are “ample” reports showing that terrorists do rely on credit card information in helping to reach their goals.

Terrorist reliance on credit cards appears to be on the rise. “I think it’s taken an upward path over the last few years,” Lormel says via phone, meaning “a limited number of people can do an incredible amount of damage.”

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Terrorism and Credit Card Information Theft - Connecting the Dots
Summary of Key Points, Issues, Conclusions:

Although no empirical statistical data establishes a connection between credit card exploitation and terrorism, there are ample anecdotal case studies demonstrating terrorist reliance on credit card information to further heinous acts. Within this white paper, two cases are presented. Terrorist groups require financial support in order to
achieve goals and credit card information theft and fraud represents a lucrative funding stream for terrorists and consequently poses a serious threat to our National Security. Lormel suggests that terrorist financing training should focus on factors to
include:

• Types of terrorist groups
• Funding capacities
• Mechanisms for fundraising and operations
• Individuals and cells

At least twelve areas of systemic weaknesses allow for terrorist exploitation to raise and move funds. Of those, at least five of those areas involve credit card information and fraud: identity theft and fraud, credit cards, criminal activity, internet, and cyberfraud.

Lormel recommends best practices for detection and prevention of credit card information theft and fraud by terrorists:

• Identifying risk
• Understanding terrorists adaptability
• Vigilance
• Training

Name of Researcher: Natalie Prendergast

Institution: Integrated Center for Homeland Security, Texas A&M University

Date Posted: November 12, 2008