Fur coats on a rack in storage at Herman Sellers Gough Furs warehouse in Scarborough, in Toronto, ... [+]
A Freeland, Michigan woman was arrested for stealing over 1,000 luxury items, valued at $823,000, from at least three fashion rental subscription websites and then reselling them online, the U.S. Attorney for the Southern District Court of New York announced on Wednesday, February 14th.
An originally sealed criminal complaint filed in Manhattan federal court alleges that for almost two years, 42-year-old Brandalene Horn committed mail fraud, wire fraud and interstate transportation of stolen property with a scheme that apparently relied on duping rental companies and exploiting credit card company practices.
Horn allegedly rented luxury items from these subscription services then sold them through online marketplaces. Adding insult to injury, Horn used the rental sites' own images and descriptions to resell the stolen property. The court did not name the subscription services affected or Horn’s preferred reselling marketplace.
As part of the investigation into Horn, special agent Deleassa Penland purchased suspected stolen items from a marketplace account with the username “cashhorn” using the pseudonym “Michael Smith” and had the packages delivered to a Manhattan P.O. box. Working with one of the rental subscription services affected by the scam, Penland confirmed that three different items she purchased as “Michael Smith” were rented by Horn from the subscription site.
Horn created more than 170 accounts across the rental subscription sites after repeated deactivations, according to the government. While she used different email addresses, phone numbers and card details for each account, she used the same physical address for shipping and billing on all of the accounts.
When the companies tried to charge Horn for the stolen items, she either canceled the credit or debit card she had provided or disputed the charge with her credit provider. Between April 2022 and February 2024, Horn allegedly stole 1,000 items valued at more than $823,000 and sold over $750,000 worth of her stolen treasures.
While Horn used her own card details and address to carry out the fraud, experienced fraudsters typically use stolen account information to buy expensive goods for resale, Doriel Abrahams, principal technologist at fraud prevention startup Forter, says. Abrahams says he’s seeing an increasing number of newbie, less sophisticated fraudsters. It may start with something seemingly harmless like opening a second account to cash in on a discount twice, but in some cases snowballs into a full-fledged scam like the one Horn is alleged to have committed.
“We call them the amateur fraudsters,’’ says Abrahams, who adds it appears more people, perhaps facing economic stress, began experimenting with fraud during the Covid-19 pandemic.
The case illustrates how even an inexperienced fraudster can create a large issue for online retailers–before eventually landing themselves in hot water. In 2023 the ecommerce industry in the U.S. alone was $1.1 trillion, Insider Intelligence reports. The same year, fraudulent card payments online resulted in $9.49 billion in losses.
In most cases, when the card is not physically present during the transaction, as with online sales, the merchant is on the hook for covering any fraud losses. When the card is physically present, the bank that issued the card is responsible for the fraud loss. This nuance makes online fraud an acute problem for online retailers that need to cover associated losses.
For amateur fraudsters, it would be better for both them and the merchant if they are stopped before the transaction could be completed, Abrahams says. One method that can strengthen fraud prevention for online merchants is if they’re able to share data with other platforms. In the case of Horn, the alleged scheme may have been stopped sooner if the rental subscription service had a shared network with the marketplace she used to resell the stolen merchandise. Another, seemingly more obvious preventive method, is for each online site to closely monitor user data to identify when one person may be opening multiple accounts.
The U.S. online clothing rental market had a projected value of $2.3 billion in 2023 and is expected to grow to $6.2 billion by 2033, according to Future Market Insights. An early mover in clothing rental subscription services was 15-year-old Rent the Runway, an online store where users can rent, subscribe or buy designer apparel. New players on the market including Nuuly, Armoire or Tulerie all offer similar services at slightly different price points.
