July 24, 2024

A view inside a fur coat warehouse in Toronto, Ontario, Canada, taken on March 21, 2022.

AFP via Getty Images

A 42-year-old woman from Freeland, Michigan was arrested on February 14th for allegedly stealing luxury items worth $823,000 from fashion rental subscription websites. The U.S. Southern District Court of New York reports that Brandalene Horn then sold the items online.

According to the sealed criminal complaint filed in Manhattan federal court, Horn committed mail fraud, wire fraud, and interstate transportation of stolen property over the course of nearly two years. The fraud involves making use of credit card company practices to deceive rental companies.

Horn is accused of renting luxury items from subscription services and then selling them online via various marketplaces. To add fuel to the fire, Horn allegedly used the images and descriptions the rental services provide for her resale of the stolen items. The names of the affected subscription services and preferred marketplace for reselling were not disclosed jointly.

Special agent Deleassa Penland, who was part of the investigation team, made purchases of suspected stolen items from an account under the username “cashhorn”. Using a fake name “Michael Smith”, she had the items shipped to a P.O. box in Manhattan. With the help of one of the affected rental subscription services, Penland verified that three items she bought were indeed rented by Horn.

As detailed by the authorities, Horn created over 170 accounts across different rental platforms after facing consistent account deactivations. She used a variety of email addresses, phone numbers, and card details but kept the same physical address for all the shipping and billing purposes.

Horn either cancelled or disputed the charges with her credit provider when the companies attempted to charge her for the items she stole. The items she allegedly stole and sold between April 2022 and February 2024 were valued at over $823,000, with Horn reportedly making sales worth over $750,000.

Doriel Abrahams, a top technologist at a fraud prevention startup called Forter, provided some insight into the fraud. He noted that experienced fraudsters often use stolen account information for purchase and resale of expensive goods. But Horn apparently used her own details for the crime, suggesting a less sophisticated approach.

Abrahams observes an increasing number of such amateur fraudsters, some of whom may have started experimenting with fraud during the Covid-19 pandemic. Cases as serious as Horn’s could start from seemingly harmless activities, like opening a second account for more discounts.

The report shows that even inexperienced fraudsters can pose a serious challenge to online retailers, who, in America’s $1.1-trillion ecommerce industry, lost $9.49 billion to fraudulent card payments in 2023.

Fraud is a pressing issue for online retailers since they must cover any fraud losses where a physical card is not present during the transaction. Abrahams suggests that amateur fraudsters could be stopped before completing the transaction, benefiting both the retailer and the fraudster. He further notes that online merchants could strengthen their fraud prevention by sharing data with other platforms and closely monitoring user data to detect anyone opening multiple accounts.

Reports from Future Market Insights project that U.S. online clothing rental market will grow from $2.3 billion in 2023 to $6.2 billion by 2033. Existing players like Rent the Runway and newcomers like Nuuly, Armoire, and Tulerie offer a range of designer apparel rental services.

Frequently Asked Questions

How did Brandalene Horn manage to commit such extensive fraud?

She allegedly rented luxury items from various fashion subscription services and sold them online. She created many accounts across these platforms using different email addresses, phone numbers, and card information, but kept the same shipping and billing address.

What consequences does online fraud have for retailers?

When purchases are made online (without a physical card), the retailer is generally responsible for covering any fraud losses. This makes fraud a serious problem for online retailers who must shoulder these losses.

How can online fraud be prevented?

Fraud prevention could be strengthened by allowing online merchants to share data with other platforms. This might have stopped Horn’s alleged scheme sooner. Close monitoring of user data, such as looking out for one person opening multiple accounts, could also be effective.