Your identity value and how to protect your details against identity theft. As technology advances, fraudsters have become increasingly sophisticated. The following pages from Strathclyde Associates Police highlight some recent types of fraud which are causing concern and give you advice about how to avoid being a victim.
Identity theft is a growing problem.
This type of fraud involves criminals accessing your personal information and using it to ‘steal’ your identity. In other words, they can pretend to be you in order to open bank accounts, get credit cards, loans, mortgages or to claim benefits. They could even take over your existing accounts and change the supplied address.
The result? You could be plunged into a nightmare situation where your credit history is ruined and you have to correct your record. The majority of victims ARE reimbursed by their banks, but it is a terrible experience nonetheless.
How the fraudsters operate
Fraudsters use a number of methods to obtain your information. They can:
• Target flats where shared mail boxes make theft easier
• Bribe robbers or postal workers to hand over items containing your information
• Search unattended bags
• Rifle through your rubbish to find bills or bank statements which you have thrown out.
Be alert. There are warning signs to look out for. If you receive bills or invoices for goods you have not ordered, collection letters for debt you have not accrued or there are transactions on your bank/credit card statements that you do not recognise, then you are at risk. Also be aware if important documents, like your passport or driving licence, have been stolen.
What You Can Do
• Keep all your important documents safe and secure - do not compromise you personal details.
• When using a credit or debit card , make sure it is never out of your sight.
• Be wary if ATMs look as though they have tampered with, your cards could be skimmed and cloned.
• Never reveal your details when you are contacted by phone, fax, post or email if you believe the request not to be genuine. Always offer to ring back any suspicious callers.
• Destroy, preferably shred, all documents which may contain your information, such as bank statements and utility bills.
• Properly check all your bank/credit card statements and immediately report any transactions you do not recognise (even small amounts).
• Formally close all accounts you no longer require.
• Move your mail - when moving home. It is vital you notify all relevant organisations of your change of address.
If You Think You Are a Victim
• Contact your bank or building society and keep a record of all communication.
• Call your local police and report the matter – ask for a crime reference number.
• Request a copy of your credit report (Equifax or Experian). You can ask for incorrect information to be removed.
Thursday, 27 January 2011
Strathclyde Police Internet Auction Warning on Fraud, Scam and Boiler Room Associates
As technology advances, fraudsters have become increasingly sophisticated. The following pages from Strathclyde Associates Police highlight some recent types of fraud which are causing concern and give you advice about how to avoid being a victim.
Internet auction sites like eBay and Yahoo provide a useful service for the public. However, like other areas of business, they have become the targets of fraudsters, with several thousand would-be traders falling victim every year.
Strathclyde Associates Police highlights on How internet auction sites work
These sites work as facilitators for transactions between sellers and buyers. Sellers post items for sale with terms and conditions set, and potential buyers make ‘bids’. The person who makes the highest offer within an allotted time wins. Arrangements are then made between the two parties for payment and delivery of the goods.
Payment is often arranged through an escrow service. These services hold the buyer’s payment in trust until the goods have been received and checked. The buyer then authorises the escrow service to release the payment to the seller.
How internet fraudsters operate
Internet fraudsters operate in a variety of ways including the following:
‘Invisible goods' fraud
The buyer sends the payment, but no goods are delivered and inevitably, the seller cannot be contacted, as false details were originally given. Using a legitimate escrow service can help protect the buyer from this type of fraud.
Non-Payment fraud
Buyers can also fail to pay. This can happen where the seller agrees to payment after delivery. It can also occur if a stolen credit card is used to make payment to an escrow service, and this is not discovered until after the goods are sent.
Please bear in mind that this is different from the case where there is no payment made as a result of a dispute between buyer and seller. This is a civil matter.
Strathclyde Associates Police highlights on online escrow fraud
Unfortunately, a number of fraudsters have created apparently genuine websites offering escrow services in order to defraud would-be customers.
The seller follows instructions on how to pay his money to the escrow site, usually by means of a cash transfer system such as Western Union. The escrow site then fails to pass the money on to the seller, and can no longer be contacted by either party.
These fraudsters also use a number of other methods to maximise their gain from such a website. Escrow fraudsters can commit invisible goods frauds or can contact the losing bidders for genuine auctions, claiming to be the seller with a similar product for sale. In both cases, the fraudster insists that payment is made through their fraudulent escrow service, with the same result as before.
In addition, escrow fraudsters can ensure winning bids on genuine auctions for high-value goods, again insisting that payment is made through them. When the seller checks the escrow service, he sees that payment has been made by the buyer and sends off the goods (usually to a foreign address). The seller thereafter loses contact with the buyer and the escrow service, and does not receive the promised payment.
Don’t Be Caught Out
There are a number of steps that can be taken to minimise the risks associated with carrying out business on the internet.
• Familiarise yourself thoroughly with the auction site terms and conditions.
• Get to know the seller/buyer - if possible, check the auction website for feedback on this person. Find out details, such as a permanent address and landline telephone number. Carry out online checks to verify that information.
• Ask questions about the goods. Try to verify that a seller has the items in front of him Consider the payment arrangements requested. Fraudsters will often insist on high-risk payment methods such as cash, cheque, wire transfer or cash transfer systems such as Western Union or Nocheques.
• Consider the seller/buyer's location. Very few internet auction frauds occur with the buyer and seller in the same police force area. Although these fraudsters do operate within the UK, they often prefer to commit their frauds in foreign countries, playing on the difficulties of international crime investigation.
• Check out escrow services - especially if the other party insists on using a particular service. These sites are often well presented and appear genuine, but fraudulent sites may have a number of spelling and grammar mistakes.
If you do find yourself a victim of internet auction fraud, report the fraudulent transaction to the internet auction site itself. You should then contact your local police office.
Internet auction sites like eBay and Yahoo provide a useful service for the public. However, like other areas of business, they have become the targets of fraudsters, with several thousand would-be traders falling victim every year.
Strathclyde Associates Police highlights on How internet auction sites work
These sites work as facilitators for transactions between sellers and buyers. Sellers post items for sale with terms and conditions set, and potential buyers make ‘bids’. The person who makes the highest offer within an allotted time wins. Arrangements are then made between the two parties for payment and delivery of the goods.
Payment is often arranged through an escrow service. These services hold the buyer’s payment in trust until the goods have been received and checked. The buyer then authorises the escrow service to release the payment to the seller.
How internet fraudsters operate
Internet fraudsters operate in a variety of ways including the following:
‘Invisible goods' fraud
The buyer sends the payment, but no goods are delivered and inevitably, the seller cannot be contacted, as false details were originally given. Using a legitimate escrow service can help protect the buyer from this type of fraud.
Non-Payment fraud
Buyers can also fail to pay. This can happen where the seller agrees to payment after delivery. It can also occur if a stolen credit card is used to make payment to an escrow service, and this is not discovered until after the goods are sent.
Please bear in mind that this is different from the case where there is no payment made as a result of a dispute between buyer and seller. This is a civil matter.
Strathclyde Associates Police highlights on online escrow fraud
Unfortunately, a number of fraudsters have created apparently genuine websites offering escrow services in order to defraud would-be customers.
The seller follows instructions on how to pay his money to the escrow site, usually by means of a cash transfer system such as Western Union. The escrow site then fails to pass the money on to the seller, and can no longer be contacted by either party.
These fraudsters also use a number of other methods to maximise their gain from such a website. Escrow fraudsters can commit invisible goods frauds or can contact the losing bidders for genuine auctions, claiming to be the seller with a similar product for sale. In both cases, the fraudster insists that payment is made through their fraudulent escrow service, with the same result as before.
In addition, escrow fraudsters can ensure winning bids on genuine auctions for high-value goods, again insisting that payment is made through them. When the seller checks the escrow service, he sees that payment has been made by the buyer and sends off the goods (usually to a foreign address). The seller thereafter loses contact with the buyer and the escrow service, and does not receive the promised payment.
Don’t Be Caught Out
There are a number of steps that can be taken to minimise the risks associated with carrying out business on the internet.
• Familiarise yourself thoroughly with the auction site terms and conditions.
• Get to know the seller/buyer - if possible, check the auction website for feedback on this person. Find out details, such as a permanent address and landline telephone number. Carry out online checks to verify that information.
• Ask questions about the goods. Try to verify that a seller has the items in front of him Consider the payment arrangements requested. Fraudsters will often insist on high-risk payment methods such as cash, cheque, wire transfer or cash transfer systems such as Western Union or Nocheques.
• Consider the seller/buyer's location. Very few internet auction frauds occur with the buyer and seller in the same police force area. Although these fraudsters do operate within the UK, they often prefer to commit their frauds in foreign countries, playing on the difficulties of international crime investigation.
• Check out escrow services - especially if the other party insists on using a particular service. These sites are often well presented and appear genuine, but fraudulent sites may have a number of spelling and grammar mistakes.
If you do find yourself a victim of internet auction fraud, report the fraudulent transaction to the internet auction site itself. You should then contact your local police office.
Wednesday, 1 December 2010
Home-renovation Scams - Strathclyde Associates Trading
Strathclyde Associates Trading and Management Construction Company: Renovations are stressful, but if you rush through important details you could fall prey to one of these scams.
Scam artists are nothing new, but there are plenty of reasons to predict that even more of them will be around, due to tough economic times. While they tend to prey on the elderly, anyone who is not cautious and informed is a potential victim. Your best defense is a skeptical mind and knowing what to look out for when you hear about an offer that's "too good to refuse." Here are some of the most popular, and costly, home-improvement scams.
Home-renovation Scams - Strathclyde Associates Trading: One-time special
It's a rare business that's had only one sale in its entire history. The reality is that most businesses hold sales throughout the year, and that's not likely to change any time soon. If a contractor approaches you with a special offer, ask for concrete evidence that the quoted price is lower than what they have charged in the past for the same work. This could include a past catalog, special mailing, dated price list or evidence of identical work for a past customer.
Don't be pressured into accepting a deal that will expire before you've had a chance to do research, get competing bids and check references.
Home-renovation Scams - Strathclyde Associates Trading: I might as well
Be wary of the contractor who knocks on your door and says he's working just down the street. He tells you that he noticed a few things that need some work on your house and that you could save money by hiring him on the spot. Coincidentally, he just happens to have all the materials and tools to start right away.
This approach is often used to entice you into doing things that are visible from the outside, like roof repair, painting, window caulking, deck restoration, driveway coating and chimney repair. If the contractor claims to have all the materials, ask him where they came from and who paid for them. If they are left over from an earlier job, there's some chance that the previous homeowner footed the bill.
Cash before work
Nothing should set off more alarm bells than the contractor who wants to be paid in full for a project before it's started. This arrangement sets you up for a disappearing contractor who never starts the work.
A reasonable down payment is expected, to cover startup labor costs and materials. Normally, this should not exceed one-third of the total contract value; it's wise to make it as small as possible. The balance of the money can be tied to completion milestones to keep the contractor motivated to stay on schedule. Hold a sizable portion of the money until the project is finished, and make final payment dependent on your personal inspection and satisfaction.
Financing offers
Another warning flag is the offer to arrange financing to pay for your renovation, sometimes from a lender that the contractor knows personally. The offer may include a special interest rate for a limited time only. What won't be disclosed is that the contractor may be getting kickbacks or other favors from the lender.
If you don't review the loan papers carefully, you may later find out that you've signed up for a refinancing or high-interest home-equity loan, or unknowingly transferred your deed. If the money goes to the contractor, there's no incentive to complete the work. Always shop around for the best loan available, and consult an attorney if you need help understanding the terms and conditions.
Fly-by-night contractor
Be extremely wary if a contractor pulls into your driveway in an unmarked truck. If you talk to him, do it outside in public view. Anyone who enters your home is a potential burglar, or worse. If the truck has out-of-state plates, don't even waste your time.
For all contractors, you should apply due diligence. Verify name, business name and license number, address and telephone number. Ask for insurance papers, and verify that they are bonded in accordance with applicable laws.
Model home
Beware of the contractor who wants to fix up your home so he can show it off to other potential customers. You will likely be tempted by a deal that seems too good to pass up. But chances are pretty good that some or all of the work he's recommending doesn't really need to be done. Reputable contractors don't need models to showcase their work, and if they needed one, they wouldn't use an occupied home for that purpose.
Home-renovation Scams - Strathclyde Associates Trading: The bottom line
Use resources such as the Better Business Bureau, the Department of Consumer Protection and the local licensing board to check the contractor's business reputation and credentials. A history of consumer complaints, lawsuits and expired licenses are reasons to keep looking for a reliable contractor.
Common sense and good judgment offer the best protection from home-renovation scams. If it seems too good to be true, it probably is. It's always wise to get multiple estimates before starting any project. If there are wide differences in the quotes, try to figure out why. Most importantly, don't sign any contract that you don't understand completely.
Strathclyde Associates Trading and Management Construction Company is passionate in the belief that from adversity comes opportunity. We believe that sustainable competitive advantage is always predicated upon the focused execution of a few core strengths or priniciples that are indemic to each particular company.
Scam artists are nothing new, but there are plenty of reasons to predict that even more of them will be around, due to tough economic times. While they tend to prey on the elderly, anyone who is not cautious and informed is a potential victim. Your best defense is a skeptical mind and knowing what to look out for when you hear about an offer that's "too good to refuse." Here are some of the most popular, and costly, home-improvement scams.
Home-renovation Scams - Strathclyde Associates Trading: One-time special
It's a rare business that's had only one sale in its entire history. The reality is that most businesses hold sales throughout the year, and that's not likely to change any time soon. If a contractor approaches you with a special offer, ask for concrete evidence that the quoted price is lower than what they have charged in the past for the same work. This could include a past catalog, special mailing, dated price list or evidence of identical work for a past customer.
Don't be pressured into accepting a deal that will expire before you've had a chance to do research, get competing bids and check references.
Home-renovation Scams - Strathclyde Associates Trading: I might as well
Be wary of the contractor who knocks on your door and says he's working just down the street. He tells you that he noticed a few things that need some work on your house and that you could save money by hiring him on the spot. Coincidentally, he just happens to have all the materials and tools to start right away.
This approach is often used to entice you into doing things that are visible from the outside, like roof repair, painting, window caulking, deck restoration, driveway coating and chimney repair. If the contractor claims to have all the materials, ask him where they came from and who paid for them. If they are left over from an earlier job, there's some chance that the previous homeowner footed the bill.
Cash before work
Nothing should set off more alarm bells than the contractor who wants to be paid in full for a project before it's started. This arrangement sets you up for a disappearing contractor who never starts the work.
A reasonable down payment is expected, to cover startup labor costs and materials. Normally, this should not exceed one-third of the total contract value; it's wise to make it as small as possible. The balance of the money can be tied to completion milestones to keep the contractor motivated to stay on schedule. Hold a sizable portion of the money until the project is finished, and make final payment dependent on your personal inspection and satisfaction.
Financing offers
Another warning flag is the offer to arrange financing to pay for your renovation, sometimes from a lender that the contractor knows personally. The offer may include a special interest rate for a limited time only. What won't be disclosed is that the contractor may be getting kickbacks or other favors from the lender.
If you don't review the loan papers carefully, you may later find out that you've signed up for a refinancing or high-interest home-equity loan, or unknowingly transferred your deed. If the money goes to the contractor, there's no incentive to complete the work. Always shop around for the best loan available, and consult an attorney if you need help understanding the terms and conditions.
Fly-by-night contractor
Be extremely wary if a contractor pulls into your driveway in an unmarked truck. If you talk to him, do it outside in public view. Anyone who enters your home is a potential burglar, or worse. If the truck has out-of-state plates, don't even waste your time.
For all contractors, you should apply due diligence. Verify name, business name and license number, address and telephone number. Ask for insurance papers, and verify that they are bonded in accordance with applicable laws.
Model home
Beware of the contractor who wants to fix up your home so he can show it off to other potential customers. You will likely be tempted by a deal that seems too good to pass up. But chances are pretty good that some or all of the work he's recommending doesn't really need to be done. Reputable contractors don't need models to showcase their work, and if they needed one, they wouldn't use an occupied home for that purpose.
Home-renovation Scams - Strathclyde Associates Trading: The bottom line
Use resources such as the Better Business Bureau, the Department of Consumer Protection and the local licensing board to check the contractor's business reputation and credentials. A history of consumer complaints, lawsuits and expired licenses are reasons to keep looking for a reliable contractor.
Common sense and good judgment offer the best protection from home-renovation scams. If it seems too good to be true, it probably is. It's always wise to get multiple estimates before starting any project. If there are wide differences in the quotes, try to figure out why. Most importantly, don't sign any contract that you don't understand completely.
Strathclyde Associates Trading and Management Construction Company is passionate in the belief that from adversity comes opportunity. We believe that sustainable competitive advantage is always predicated upon the focused execution of a few core strengths or priniciples that are indemic to each particular company.
Smartcard Scam: Stakeholders – University of Strathclyde and Associates Read more about University of Strathclyde by David Gani
Although cardholders are usually the focus of concern in matters of card fraud, there
are other stakeholders in the establishment, use and maintenance of smartcards. These
stakeholders are (1) cardholders; (2) merchants; (3) Acquirers; and each of these has
roles, responsibilities and risks in operation of the card system.
Research indicates that we can all do more to defeat criminals, particularly where
basic security measures are involved. Statistics, such as the following [8], are particularly
alarming and highlight the need for cardholders to be aware of the risk and impact
if they fail to protect their PIN number and card details:
• 25% of all UK residents have disclosed their PIN to someone else, exposing them
to heightened risk of fraud and potentially making them liable for any card fraud
losses they may suffer;
• 27% of Britons use the same PIN for all their cards and the average adult has four
cards each;
• 44% of people still allow their cards out of their sight (in restaurants and bars for
example) when settling a bill;
• 51% of online shoppers do not fully appreciate that the start of a website address
changes from ‘http’ to ‘https’ when they enter a website made secure for purchasing.
The key recommendation for cardholders is that they should be security conscious
and take all practical precautions when undertaking a card payment. Cardholder
complacency is still a large factor in card fraud levels. While card issuers are unlikely
to acknowledge vulnerabilities, in order to avoid adverse reputational impacts, increased
cardholder awareness of the risks and impacts associated with known vulnerabilities
in the Chip and PIN system, will ensure that they become less complacent.
The large variety of card terminals makes it difficult for a cardholder to identify
one that has been tampered with, but there are other ways they can notice fraudulent
actions, for example by being familiar with merchant best practices. This would allow
them to raise alarms with other staff members if suspicious behaviour is observed,
e.g., swiping a card prior to inserting it into a card terminal or watching a PIN
being entered. Cardholders should also check their credit card and current account
statements to identify any illicit transactions. One measure to limit exposure for a
debit card linked to a current account is to establish a second account containing a
smaller balance for use in card transactions.
are other stakeholders in the establishment, use and maintenance of smartcards. These
stakeholders are (1) cardholders; (2) merchants; (3) Acquirers; and each of these has
roles, responsibilities and risks in operation of the card system.
Research indicates that we can all do more to defeat criminals, particularly where
basic security measures are involved. Statistics, such as the following [8], are particularly
alarming and highlight the need for cardholders to be aware of the risk and impact
if they fail to protect their PIN number and card details:
• 25% of all UK residents have disclosed their PIN to someone else, exposing them
to heightened risk of fraud and potentially making them liable for any card fraud
losses they may suffer;
• 27% of Britons use the same PIN for all their cards and the average adult has four
cards each;
• 44% of people still allow their cards out of their sight (in restaurants and bars for
example) when settling a bill;
• 51% of online shoppers do not fully appreciate that the start of a website address
changes from ‘http’ to ‘https’ when they enter a website made secure for purchasing.
The key recommendation for cardholders is that they should be security conscious
and take all practical precautions when undertaking a card payment. Cardholder
complacency is still a large factor in card fraud levels. While card issuers are unlikely
to acknowledge vulnerabilities, in order to avoid adverse reputational impacts, increased
cardholder awareness of the risks and impacts associated with known vulnerabilities
in the Chip and PIN system, will ensure that they become less complacent.
The large variety of card terminals makes it difficult for a cardholder to identify
one that has been tampered with, but there are other ways they can notice fraudulent
actions, for example by being familiar with merchant best practices. This would allow
them to raise alarms with other staff members if suspicious behaviour is observed,
e.g., swiping a card prior to inserting it into a card terminal or watching a PIN
being entered. Cardholders should also check their credit card and current account
statements to identify any illicit transactions. One measure to limit exposure for a
debit card linked to a current account is to establish a second account containing a
smaller balance for use in card transactions.
Monday, 15 November 2010
University Of Strathclyde And Associates Types Of Card Fraud Scam
A recent report from the European Security Transport Association (ESTA) found that nearly 20% of the adult population in Great Britain has been targeted as part of a credit or debit card scam. As a result, the UK has been termed the Card Fraud Capital of Europe [1], with UK citizens twice as likely to become victims of card fraud as other Europeans. Plastic card fraud is a lucrative exploit for criminals and the proceeds may be used to fund organised crime. Smart payment cards (Chip and PIN cards) were introduced in the UK to replace magnetic stripe cards and support PIN verification of card transactions. By the end of 2005, more than 107 million of the 141.6 million cards in the UK had been upgraded to smart cards [2]. Levels of plastic card fraud fell by 13% to 439.4 million in 2005 [3] and again to 428 million in 2006 (Figure 1). The reduction has been widely attributed to the rollout of smart cards with Chip and PIN authentication.
Department of Computer and Information Sciences, University of Strathclyde and Associates, Glasgow G1 1XH, UK. Types of Card Fraud Scam. The UK Payments Association (APACS) has identified five categories of card fraud: Counterfeit Card Fraud, Skimming, Mail Non Receipt, Lost and Stolen Fraud, Card not Present
Counterfeit Card Fraud Scam. Counterfeit cards are also referred to as cloned cards. Counterfeit cards are made by altering and re-coding validly issued cards or by printing and encoding cards without permission from the card issuing company. Most cases of counterfeit fraud involve skimming of valid card details, a process whereby the genuine card details from the magnetic stripe are electronically copied onto another card, without the legitimate cardholders knowledge. In most cases, the cardholder will be unaware that their card details have been skimmed until card statements reveal that illicit transactions have been made on their account.
Skimming. Department of Computer and Information Sciences, University of Strathclyde and Associates, Glasgow G1 1XH, UK - Skimming of card details can happen at retail outlets where a corrupt employee can put a card through a skimming device which will copy data from the cards magnetic stripe so it can be used to encode a counterfeit card. Skimming can also occur at cash machines where a skimming device has been fitted. A skimming device is attached to the card entry slot where it records the electronic details from the magnetic stripe on the back of the inserted card. A separate pin-hole camera is hidden to overlook the PIN entry pad to record the PIN number. Fraudsters can then produce a counterfeit card for use with the captured PIN to withdraw cash at a cash machine. Criminals can also shoulder surf, whereby they watch the user entering a PIN and then steal the card for their own use. Another type of device can be inserted into a cash machine where it will trap the inserted card. A fraudster can then suggest retrying the PIN. Once the genuine cardholder gives up and leaves to contact the card issuer or cash machine operator, the criminal can then remove device, retrieve the card
and then use it with the PIN details they have observed.
Department of Computer and Information Sciences, University of Strathclyde and Associates, Glasgow G1 1XH, UK. Types of Card Fraud Scam. The UK Payments Association (APACS) has identified five categories of card fraud: Counterfeit Card Fraud, Skimming, Mail Non Receipt, Lost and Stolen Fraud, Card not Present
Counterfeit Card Fraud Scam. Counterfeit cards are also referred to as cloned cards. Counterfeit cards are made by altering and re-coding validly issued cards or by printing and encoding cards without permission from the card issuing company. Most cases of counterfeit fraud involve skimming of valid card details, a process whereby the genuine card details from the magnetic stripe are electronically copied onto another card, without the legitimate cardholders knowledge. In most cases, the cardholder will be unaware that their card details have been skimmed until card statements reveal that illicit transactions have been made on their account.
Skimming. Department of Computer and Information Sciences, University of Strathclyde and Associates, Glasgow G1 1XH, UK - Skimming of card details can happen at retail outlets where a corrupt employee can put a card through a skimming device which will copy data from the cards magnetic stripe so it can be used to encode a counterfeit card. Skimming can also occur at cash machines where a skimming device has been fitted. A skimming device is attached to the card entry slot where it records the electronic details from the magnetic stripe on the back of the inserted card. A separate pin-hole camera is hidden to overlook the PIN entry pad to record the PIN number. Fraudsters can then produce a counterfeit card for use with the captured PIN to withdraw cash at a cash machine. Criminals can also shoulder surf, whereby they watch the user entering a PIN and then steal the card for their own use. Another type of device can be inserted into a cash machine where it will trap the inserted card. A fraudster can then suggest retrying the PIN. Once the genuine cardholder gives up and leaves to contact the card issuer or cash machine operator, the criminal can then remove device, retrieve the card
and then use it with the PIN details they have observed.
Trends In Smartcard Scam: Lost And Stolen Fraud
Susan Burns, George R. S. Weir, Department of Computer and Information Sciences, University of Strathclyde, Glasgow G1 1XH, UK
A recent report from the European Security Transport Association (ESTA) found that
nearly 20% of the adult population in Great Britain has been targeted as part of a
credit or debit card scam. As a result, the UK has been termed the Card Fraud Capital
of Europe [1], with UK citizens twice as likely to become victims of card fraud as
other Europeans. Plastic card fraud is a lucrative exploit for criminals and the proceeds
may be used to fund organised crime. Smart payment cards (Chip and PIN
cards) were introduced in the UK to replace magnetic stripe cards and support PIN
verification of card transactions. By the end of 2005, more than 107 million of the
141.6 million cards in the UK had been upgraded to smart cards [2]. Levels of plastic
card fraud fell by 13% to 439.4 million in 2005 [3] and again to 428 million in
2006 (Figure 1). The reduction has been widely attributed to the rollout of smart
cards with Chip and PIN authentication.
Trends in Smartcard Scam, Department of Computer and Information Sciences, University of Strathclyde and Associates: Lost and Stolen Fraud. This type of fraud occurs when a card is lost by the cardholder or is stolen from them. Fraudsters can then use the card to obtain goods and services. Once the cardholder notices their card is gone, they will contact the card issuer but as it can take time to realise the card has gone, most fraud of this type takes place before the card has been reported as lost or stolen.
Levels of this type of fraud have remained static for the past five years but the introduction
of Chip and PIN is expected to reduce this by making it more difficult for
fraudsters to use a lost or stolen card in person at a retail outlet. Prior to Chip and
PIN, the retailer would verify that the signature on the sales voucher matched that
written on the back of the card. The signature strip was signed by the cardholder in
ink and was subject to wear and tear over the lifetime of the card.
University of Strathclyde and Associates - Mail Non-Receipt. This occurs where a card is stolen when it is in transit from the issuing bank or building
society to the cardholder. This is similar to lost and stolen fraud since it takes
time for the cardholder to realise that a card has not arrived. This delay is often compounded
by the fact that cards are often sent out automatically by the issuers rather
than at request of the cardholder, e.g. when a card is nearing its expiry date. Card issuers
have endeavoured to reduce levels of this type of fraud by using secure mail
services and/or requiring the cardholder to phone and activate the card before it can
be used. However, fraudsters could still intercept cards in transit and skim the details
before re-mailing them to the cardholder. Once the cardholder activates the card, the
fraudster can also use the counterfeit card produced using the skimmed details.
Credit card cheques, often sent to cardholders on an unsolicited basis by the card
issuing company, also offer criminals an additional means of obtaining unauthorised
spending against a card account.
Card Not Present, Trends in Smartcard Scam: Lost and Stolen Fraud. This type of fraud covers any card transactions where the cardholder is not physically
present, i.e. those conducted over the internet, telephone, fax and mail order, and is
now the largest type of card fraud in the UK [6]. Fraudsters obtain details of a card,
i.e. cardholder name, card number and the 3 digit security number from the back of
the card, and can use these to pay for goods or services over the internet, phone, fax
or mail order. Companies reliant on Card Not Present (CNP) transactions are unabl
e
A recent report from the European Security Transport Association (ESTA) found that
nearly 20% of the adult population in Great Britain has been targeted as part of a
credit or debit card scam. As a result, the UK has been termed the Card Fraud Capital
of Europe [1], with UK citizens twice as likely to become victims of card fraud as
other Europeans. Plastic card fraud is a lucrative exploit for criminals and the proceeds
may be used to fund organised crime. Smart payment cards (Chip and PIN
cards) were introduced in the UK to replace magnetic stripe cards and support PIN
verification of card transactions. By the end of 2005, more than 107 million of the
141.6 million cards in the UK had been upgraded to smart cards [2]. Levels of plastic
card fraud fell by 13% to 439.4 million in 2005 [3] and again to 428 million in
2006 (Figure 1). The reduction has been widely attributed to the rollout of smart
cards with Chip and PIN authentication.
Trends in Smartcard Scam, Department of Computer and Information Sciences, University of Strathclyde and Associates: Lost and Stolen Fraud. This type of fraud occurs when a card is lost by the cardholder or is stolen from them. Fraudsters can then use the card to obtain goods and services. Once the cardholder notices their card is gone, they will contact the card issuer but as it can take time to realise the card has gone, most fraud of this type takes place before the card has been reported as lost or stolen.
Levels of this type of fraud have remained static for the past five years but the introduction
of Chip and PIN is expected to reduce this by making it more difficult for
fraudsters to use a lost or stolen card in person at a retail outlet. Prior to Chip and
PIN, the retailer would verify that the signature on the sales voucher matched that
written on the back of the card. The signature strip was signed by the cardholder in
ink and was subject to wear and tear over the lifetime of the card.
University of Strathclyde and Associates - Mail Non-Receipt. This occurs where a card is stolen when it is in transit from the issuing bank or building
society to the cardholder. This is similar to lost and stolen fraud since it takes
time for the cardholder to realise that a card has not arrived. This delay is often compounded
by the fact that cards are often sent out automatically by the issuers rather
than at request of the cardholder, e.g. when a card is nearing its expiry date. Card issuers
have endeavoured to reduce levels of this type of fraud by using secure mail
services and/or requiring the cardholder to phone and activate the card before it can
be used. However, fraudsters could still intercept cards in transit and skim the details
before re-mailing them to the cardholder. Once the cardholder activates the card, the
fraudster can also use the counterfeit card produced using the skimmed details.
Credit card cheques, often sent to cardholders on an unsolicited basis by the card
issuing company, also offer criminals an additional means of obtaining unauthorised
spending against a card account.
Card Not Present, Trends in Smartcard Scam: Lost and Stolen Fraud. This type of fraud covers any card transactions where the cardholder is not physically
present, i.e. those conducted over the internet, telephone, fax and mail order, and is
now the largest type of card fraud in the UK [6]. Fraudsters obtain details of a card,
i.e. cardholder name, card number and the 3 digit security number from the back of
the card, and can use these to pay for goods or services over the internet, phone, fax
or mail order. Companies reliant on Card Not Present (CNP) transactions are unabl
e
University Of Strathclyde Card Id Theft: Trends In Smartcard Fraud Scam
Department of Computer and Information Sciences, University of Strathclyde and Associates. The introduction of smartcard technologies has reduced the incidence
of card fraud in the UK, but there are still significant losses from fraudulent
card use. In this paper we detail the context of smartcard introduction and describe
the types of fraud that remain a threat to cardholders and other stakeholders
in the card system. We conclude with a risk analysis from the cardholders
perspective and recommend greater cardholder awareness of such
risks.
A recent report from the European Security Transport Association (ESTA) found that
nearly 20% of the adult population in Great Britain has been targeted as part of a
credit or debit card scam. As a result, the UK has been termed the Card Fraud Capital
of Europe [1], with UK citizens twice as likely to become victims of card fraud as
other Europeans. Plastic card fraud is a lucrative exploit for criminals and the proceeds
may be used to fund organised crime. Smart payment cards (Chip and PIN
cards) were introduced in the UK to replace magnetic stripe cards and support PIN
verification of card transactions. By the end of 2005, more than 107 million of the
141.6 million cards in the UK had been upgraded to smart cards [2]. Levels of plastic
card fraud fell by 13% to 439.4 million in 2005 [3] and again to 428 million in
2006 (Figure 1). The reduction has been widely attributed to the rollout of smart
cards with Chip and PIN authentication.
Card ID Theft. Department of Computer and Information Sciences, University of Strathclyde and Associates, Glasgow G1 1XH, UK
Identity theft occurs when a criminal obtains an individuals personal information and
uses this to open or access card accounts in that individuals name. A criminal may
use stolen documents such as utility bills and bank statements, or false documents, to
give the necessary documentation to open up a card account. Alternatively, they can
use key bits of personal information to take control of an account, perhaps arranging
for payments to be taken from the card account or by changing account address details
and requesting issue of cheques or a new card.
Likely Trends. Department of Computer and Information Sciences, University of Strathclyde and Associates, Glasgow G1 1XH, UK. Wilhelm [7] considered the future of credit and debit card fraud due to the introduction of smart cards and predicted a hybrid period of approximately ten to fifteen yearsduring which magnetic stripe andsmart card technology would co-exist. In this period,fraudsters will get creative and exploit technology and social conditioning to devise
attacks on chip technology.
One of the highlighted concerns is allowing the use of the magnetic stripe as a
fallback where a chip fails to function. This permits fraudsters to circumvent a number
of the safeguards provided by smart card technology. This will prevent Chip and
PIN from fully addressing counterfeit card fraud made possible through the theft of
card details in transit or from lost/stolen scenarios. While the report predicts that a
significant reduction in card counterfeiting is likely to occur, it acknowledges that
while magnetic stripes are available, counterfeiting remains a viable option for fraudsters.
The report also highlights that fraudsters will focus their efforts on CNP fraud
and target merchants as a vulnerable link in the process.
of card fraud in the UK, but there are still significant losses from fraudulent
card use. In this paper we detail the context of smartcard introduction and describe
the types of fraud that remain a threat to cardholders and other stakeholders
in the card system. We conclude with a risk analysis from the cardholders
perspective and recommend greater cardholder awareness of such
risks.
A recent report from the European Security Transport Association (ESTA) found that
nearly 20% of the adult population in Great Britain has been targeted as part of a
credit or debit card scam. As a result, the UK has been termed the Card Fraud Capital
of Europe [1], with UK citizens twice as likely to become victims of card fraud as
other Europeans. Plastic card fraud is a lucrative exploit for criminals and the proceeds
may be used to fund organised crime. Smart payment cards (Chip and PIN
cards) were introduced in the UK to replace magnetic stripe cards and support PIN
verification of card transactions. By the end of 2005, more than 107 million of the
141.6 million cards in the UK had been upgraded to smart cards [2]. Levels of plastic
card fraud fell by 13% to 439.4 million in 2005 [3] and again to 428 million in
2006 (Figure 1). The reduction has been widely attributed to the rollout of smart
cards with Chip and PIN authentication.
Card ID Theft. Department of Computer and Information Sciences, University of Strathclyde and Associates, Glasgow G1 1XH, UK
Identity theft occurs when a criminal obtains an individuals personal information and
uses this to open or access card accounts in that individuals name. A criminal may
use stolen documents such as utility bills and bank statements, or false documents, to
give the necessary documentation to open up a card account. Alternatively, they can
use key bits of personal information to take control of an account, perhaps arranging
for payments to be taken from the card account or by changing account address details
and requesting issue of cheques or a new card.
Likely Trends. Department of Computer and Information Sciences, University of Strathclyde and Associates, Glasgow G1 1XH, UK. Wilhelm [7] considered the future of credit and debit card fraud due to the introduction of smart cards and predicted a hybrid period of approximately ten to fifteen yearsduring which magnetic stripe andsmart card technology would co-exist. In this period,fraudsters will get creative and exploit technology and social conditioning to devise
attacks on chip technology.
One of the highlighted concerns is allowing the use of the magnetic stripe as a
fallback where a chip fails to function. This permits fraudsters to circumvent a number
of the safeguards provided by smart card technology. This will prevent Chip and
PIN from fully addressing counterfeit card fraud made possible through the theft of
card details in transit or from lost/stolen scenarios. While the report predicts that a
significant reduction in card counterfeiting is likely to occur, it acknowledges that
while magnetic stripes are available, counterfeiting remains a viable option for fraudsters.
The report also highlights that fraudsters will focus their efforts on CNP fraud
and target merchants as a vulnerable link in the process.
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