DCA Reports High Incidence of Credit Card Fraud on Pirate Sites

Digital Citizens Alliance (DCA) released a new report yesterday with the eye-popping statistic that 72% of Americans who subscribe to pirate media sites experience incidences of credit card fraud compared to 18% prevalence of credit card fraud among those who do not subscribe to pirate sites. These data are based on a survey of 2,030 Americans, of which 1 in 3 reported watching some pirated content in the last year, and 1 in 10 reported subscribing to a pirate streaming service. The report titled Giving Pirate Site Operators Credit states …

… piracy was once primarily a headache for content creators, users of these sites now face significant risks. Piracy subscription services make an estimated $1 billion a year providing services to at least nine million U.S. households.

DCA’s findings indicate that around 6.5 million Americans who choose to access movies, TV shows, and games in this black market, have been targeted for credit card fraud as a direct result of their subscriptions. And although I say the stat is “eye-popping,” given the environment we’re talking about, perhaps the real surprise is that the rate of unauthorized credit card charges in this network isn’t closer to 100%. After all, it’s one thing when hackers steal credit card data from legit retailers et al., but subscribing to a pirate site is cutting out the middleman and giving credit card info directly to a network of hackers.

The shift to high-quality streaming a little over ten years ago created an opportunity for pirates to launch new platforms offering low-price subscriptions to “everything” because, of course, none of the material they’re streaming is legally obtained but is stored on pirate servers around the world. Just as other DCA reports have shown that among the hidden costs of this all-you-can-eat offer is a high probability of infection with life-altering malware, the likelihood of unauthorized charges to a credit card is apparently even greater. “Combined with our previous research highlighting the risks associated with free piracy apps and services, the situation becomes even clearer. The pursuit of pirated content is an inherently risky behavior that threatens the devices, wallets, and privacy of consumers,” says DCA executive director Tom Galvin in a press release accompanying the new study.

DCA Research Subscriptions Trigger Fraud Within Eleven Days

Prior to conducting its survey of American consumers, DCA researchers subscribed to 20 pirate sites using a new credit card obtained for the experiment. In less than two weeks, the fraudulent charges began to appear from China, Singapore, Hong Kong, and Lithuania, and within three-months, DCA’s card was targeted with $1,495 in executed and attempted unauthorized transactions. The largest attempted transaction was $850, which was stopped by fraud protection, and the largest approved charge was $244.78. Given the implied cost to credit card services to provide protection against such transactions, DCA’s first recommended remedy—that the payment processors terminate relationships with known pirate sites—seems like a no-brainer.

DCA also recommends that the Federal Trade Commission “take piracy more seriously” and prioritize warning Americans about the risks associated with pirate sites; it recommends more consumer protection group outreach on this issue; and it recommends that law enforcement more aggressively investigate pirate site operators, now armed with the 2020 amendment to the U.S. Copyright Act which elevated large-scale piracy by means of streaming from a misdemeanor to a felony. “Given that the piracy ecosystem is now a $2 billion industry, the Department of Justice should use that authority to target piracy operators,” the report states.

Personally, I would be curious to know something about the thinking of 9 million Americans who want cheap media streaming so badly that they’re willing to tolerate the high risk of credit card fraud and/or a dangerous malware attack. Of course, to DCA’s point, perhaps the majority of these subscribers don’t know how risky accessing these sites can be.

Photo source by: Wichayada57844

David Newhoff
David is an author, communications professional, and copyright advocate. After more than 20 years providing creative services and consulting in corporate communications, he shifted his attention to law and policy, beginning with advocacy of copyright and the value of creative professionals to America’s economy, core principles, and culture.

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