Many financial institutions (PayPal, brokerage houses, Google) when you create an account with them, to verify bank information they deposit a small micro deposit into your bank account. Well some script kiddy figured out how to take advantage of the micro deposit system and walk away with a cool $50k. The only problem is… He got caught.
A hacker has used a loophole to collect more than $50,000 from Google Checkout and online brokerage firms, a few cents at a time.
When opening an online brokering account it is common practice for companies such as E-trade and Schwab to send a tiny payment - ranging from only a few cents to a couple of dollars - to verify that the user has access to the bank account listed. Services such as Google Checkout and Paypal use a similar tactic to verify credit and debit cards linked to accounts.
According to court documents, Californian Michael Largent used an automated script to open 58,000 such accounts, collecting many thousands of these small payments into a few personal bank accounts.
Largent also performed the same trick with Google’s Checkout service, cashing more than $8,000 alone from the service.
He is currently free on bail pending a court judgement on charges of wire, bank and mail fraud for his antics with the online brokerage sites, although his similar approach to getting cash out of Google has not been pursued by police as of this time.
It’s interesting that Google is not part of the suit - perhaps Mr. Largent is correct that he did not break any rules when bilking Google.
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