International Crime Ring Suspected in 7-Eleven App Breach

On Monday, 7-Eleven launched a smartphone payment service for its 20,000 stores in Japan. By Thursday $510,000 had been stolen from the people using it — as many as 900 customers.

Long-time Slashdot reader shanen shared this follow-up article, which points out that it’s also possible that email addresses and birth dates have been accessed from among the new app’s 1.5 million registered users:
Tsuyoshi Kobayashi, president of Seven Pay Co., told a press conference in Tokyo that the company will compensate users for the losses caused by fraudulent access and that it has already suspended accepting new users or allowing users of the service to add money to its smartphone application. The estimated amount of losses the company announced is as of 6 a.m. Thursday and the damage could expand…

The parent company said someone, who had accessed their accounts and used the registered numbers of their credit or debit cards, purchased items at its convenience stores. The items included packs of cigarettes, which can be easily converted into cash, it said, adding there was a case in which a huge quantity worth 100,000 yen [$921] was purchased all at once at one of its outlets…

According to Seven & i Holdings, some customers reported their losses on Tuesday and unauthorized access from China and other locations outside Japan was confirmed… Police arrested two Chinese men on Thursday in connection with the problem, investigative sources said. They are suspected of illegally using the ID and password of a customer Wednesday in an attempt to buy electric cigarette cartridges worth around 200,000 yen [$1,843] at a 7-Eleven shop in Tokyo.

Nikkei Asian Review reports that one of the suspects “received instructions about gaining unauthorized access to 7pay accounts via WeChat, a popular Chinese messaging app. The Metropolitan Police Department suspects the involvement of an international criminal organization.” (Japan Times reports that one man was asked to do “some shopping” after which they would receive “a reward”.)

Nikkei Asian Review also notes that the Japanese government has been pushing to to have a least 40% of all payments be cashless by the mid-2020s — including generous government tax incentives — which one consumer finance writer says has “overheated” the market, while “the quality of services has declined in some cases.”

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