1

Imagine a scenario like:

1. Hacker steals credit card info.
2. He uses stolen card to buy virtual assets on Steam.
3. He sells these virtual assets to other unsuspecting players in exchange for PayPal.
4. <Possibly repeats steps 2-3 many times>
5. Leaves with remaining PayPal funds.

Here, who actually loses the money that the hacker gains? These are the options I see:

A. Owner of the credit card

He is responsible for the safety of his own account.

B. The bank that issued the card

Most banks have fraud protection, so they refund the card holder and accept the losses.

C. Valve Corporation (Company that runs the virtual platform)

Bank contacts Valve to refund the purchase (this seems unlikely to me), which Valve does.

  • Pretty sure that if you sell virtual assets on Steam you only get Steam cash in your account. You can't get it in other account like PayPal. – Nosjack Jul 19 '18 at 15:28
  • 1
    Yeah, but people often sell them for PayPal on third party sites like marketplace.tf and opskins.com . They transfer the assets through Steam trade and send PayPal directly. – Hele Jul 19 '18 at 15:41
5

In the US it's not the owner of the credit card, the Fair Credit Billing Act limits cardholder liability to $50 if the physical card is stolen, and $0 if not.

Rather than the banks eating this cost, they often take it from the merchants, those are called chargebacks. With card present transactions (ie brick and mortar store) a merchant can be compliant with the issuers security policy to the point where they are not liable for fraudulent charges in which case the issuer takes the hit. In the world of card not present transactions (pretty much anything online) the merchant is typically liable.

Merchants have varying degrees of recourse, Valve will restrict accounts, remove items, etc..

In cases of fraudulent online purchases, it's typically the merchant who loses out. So in your example it's most likely that Valve is losing the revenue.

  • I think there should have been a fourth option in my question - D. The purchasers of virtual goods via PayPal. If Valve removes items from purchaser's accounts, they lose value too (though Valve could be seen as still losing liquid money). – Hele Jul 19 '18 at 17:21
  • @Hele True, in that case the purchaser would probably raise complaint with Paypal and get a refund, in which case the funds would be removed from the seller's account or PayPal would take the hit. If the seller got funds out of PayPal prior to that, it could cost Valve revenue and cost Paypal cash. – Hart CO Jul 19 '18 at 17:24

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