Economic offenses through Credit Card Frauds Dissected

ECONOMIC OFFENCES USING CREDIT CARDS Harshad S. Patil, B.Tech. (I.T.)(V.J.T.I.), PG.Dip. Cyber Crime Management 6/12/08

Agenda ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Fraud Defined ,[object Object],[object Object],[object Object],Examples of Fraud ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Types of Fraud ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Pharmacy fraud Identity Fraud Financial Fraud Auction Fraud Sweepstakes Fraud Counterfeit Payments Fraud

Causes of Fraud Rationalization Incentive Opportunity

The Fraud Triangle helps explaining the human process for committing fraud ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],These issues on employees can be reduced via Employee Assistance Plans, counseling and work assignments. EAPs are management’s tool to help control fraud. Fraud Indicators ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Rationalization Incentive Opportunity

Why does credit card fraud matter? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Why is CCF more damaging and disastrous than most of the other types?

CCF break up as per types http://www.popcenter.org/problems/credit_card_fraud/images/piechart.gif

Stats in Canada Data source: Statistics Canada, Canadian Centre for Justice Statistics,

Stats in US Source: http://www.stargatesemiconductor.com/9003460290/CreditCardFraud.bmp

Glossary: Describes the process in which a device is used to copy the magnetic stripe encoding off of a card - one reason card holders are cautioned against using ATM machines that look unusual Skimming A loan or credit card debt written off as uncollectible from the borrower. The debt, however, remains valid and subject to collection Charge off ,[object Object],[object Object],SSL ,[object Object],[object Object],[object Object],Gateway ,[object Object],[object Object],IMA Internet Payment Service Provider or Payment Service Provider, provider supplying an online payment solution. Cashtronics is an IPSP or PSP IPSP ,[object Object],[object Object],Chargeback

For the merchants, its terrifying!! ,[object Object],[object Object],[object Object]

Credit card (Front Side) ,[object Object],[object Object]

Credit card (Rear Side) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Meaning of CC digits: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Credit Card Skimming ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Working (Simple Version) & Intrusion points ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Customer Applies Bank Issues Credit Card Customer Uses Card Merchant Receives Card Payment Processor Receives Card Payment Processor Bills Bank Customer Pays Stolen Illgotten card, theft, or skimmered Issued by bank without demand from customer/supplied by dishonest courier Illegitimate users (criminal involvement at both ends) Forged request

From where do they get your information? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What is Credit Card Fraud (CCF) ,[object Object],[object Object]

Techniques used to carry out ATM crime ,[object Object],[object Object],[object Object],[object Object],[object Object]

Modus Operandi of CCF using Identity Theft Sale of ID data. Goods available on underground servers: 1 Credit cards (22%) US$ 0.50 – 1 2 Bank accounts (21%) US$ 30-400 3 Email passwords (8%) US$ 1-350 4 Full identity (6%) US$ 10-150 (Symantec data for Jan – June 2007) OBTAIN IDENTITY INFORMATION FRAUD AND OTHER OFFENCES ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],CREDIT CARD FRAUD USING IDENTITY THEFT ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Common Types of CCF ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Emerging Fraud: Online Credit Card Fraud ,[object Object],[object Object],[object Object],[object Object],[object Object],This device is usually secretly mounted to an ATM machine as a card reader. ,[object Object],[object Object],Phishing Pharming Skimming Dumpster Diving

Tools used for CCF ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

CC generator ,[object Object],[object Object],[object Object],www.darkcoding.net/credit-card-numbers/ 5216888204052176 5361871831570078 5286074279331408 536803086244 3423 5396839522947938 5292133095448960 5167035421750120 5156159382388820 55 69714931432734 5428252030308191 MasterCard 4532939254681966 4024007136276580 4885243440090833 4929608176033892 4 532914364464397 4485479173552029 4539012558094428 4650496026227442 4716291 536495148 4623817115847754 VISA 375619651773339 376605277731560 372447156708581 348116787204085 373 589733548110 American Express 6011077158325292 6011239020479349 6011696418325048 Discover

Creditwizard site:www.CreditCardgenerator.org

Sale of Credit Cards: Whats the rate going on in US? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Hackershomepage.com 800b MSR206 MAGNETIC STRIPE CARD READER/WRITER ,[object Object],[object Object],[object Object],[object Object]

From Hackershomepage.com POS (Point Of Sale) Data Logger ,[object Object],[object Object],[object Object]

Warning signs of Credit Card Fraud (CCF) ,[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Factors contributing to CCF

Credit Card Fraud (CCF) Detection ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Strategies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Prevention Detection

Fraud prevention techniques Tactical Guidelines Enterprises selling online should: • Assess their risk exposure to online credit card fraud based on their own experiences and on the types of goods and services they sell. • Implement internal rules and procedures that can identify many potential frauds. • Consider using fraud-prevention products and services to assess each transaction attempt if the risk of fraud is significant.

Latest means to prevent CCF ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Battery credit card to avoid fraud ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Softwares for preventing Credit Card fraud ,[object Object],[object Object]

Credit Card Fraud Detection Techniques

AVS (Address Verification System) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

1. Pattern Detection ,[object Object],[object Object],[object Object],[object Object],[object Object]

2. Fraud Screening ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Features Benefits

3. Cardwatch site: www.cardwatch.org.uk ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

4. 3D secure ,[object Object],[object Object],[object Object],Limitations of 3D Secure ,[object Object],[object Object]

Fraudlabs ,[object Object],[object Object],[object Object]

CHIP AND PIN METHOD site: http://www.chipandpin.co.uk/ ,[object Object],[object Object],Microchip technology The ease with which credit cards with magnetic stripes are used in defrauding companies, financial institutions and individuals have necessitated banks and other card issuing companies to implement microchip card technology. This is due to the fact that cards with magnetic stripes can to easily be cloned. The cardholder’s information will be stored on a microchip, which will be much safer than the magnetic stripe. The new standard, to which all role players must adhere to, will come into operation on the 1st January 2005. This new standard was dubbed EMV, which was taken from the first letter of the three companies that initiated it, namely Europay, Visa and MasterCard. This technology was introduced in France more than 10 years ago. According to the credit card industry in this country card fraud dropped by 80% after the new technology was introduced. This new prevention method does not come cheap and banks are spending millions changing from the old magnetic stripe cards to the new generation microchip cards. It is estimated that the conversion process in South Africa will entail issuing new cards to 16-million users, upgrading 9000 ATM’s throughout the country, upgrading 130 000 point-of-sale terminals and upgrades on back-end processing systems to handle the new technology. This will come at a price tag of between R 1,5bn and R 2bn extended over a period off 10 years. Converting a top of the range ATM can cost as much as R 30 000.00. This technology will, however, require the customer to pin in a code every time they use the credit card. This is safer due to the fact that merchants or cashiers will no longer have to verify signatures. Studies in Europe have shown that signature based products are more susceptible to those that are PIN based. One advantage of smart card technology is that a credit card will be able to hold a considerable amount of information. This will ensure that even merchants in rural areas will be able to accept payments without telephonic access to a bank. Some of the major banks have started issuing the new cards to their employees for internal trials and to certain clients.

Difference between normal and Chip n Pin Method

Limitations of CHIP and PIN ,[object Object],[object Object],[object Object],Devices for breaching CHIP and PIN ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Credit Card Fraud Management ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Deploy a Spam and Malware Catchers

1,333 Intruders Caught in one Week

The need? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Suggested Precautions to be taken by merchants for prevention of online CCF Geolocation by IP address Know the online buyers geographic information to prevent fraud. Identify locations where the probability of fraud is the highest. It allows additional authentication measures or identification for those transactions which show a great difference of distance. Legitimate customers welcomes legitimate authentication measures, which will protect them from credit card fraud also and keep the costs of doing business on the Internet down, especially if the customer is properly informed and advised by the merchant of these protection measures. Comparison of the IP address country with the billing address country ,[object Object],Check whether the country is a “high risk” country ,[object Object],[object Object],[object Object],Check whether an anonymous proxy server was used to place the order ,[object Object],[object Object]

Tools to control CCF ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],But, as cost increases, with increase in tools used, it is not economically feasible and therefore fraudsters are fortunate and get the opportunity to rob people by plastic money and go scot-free due to legal lacuna in the system. (Suggestion: There should be strict liability and burden of proof should be on accused like food adulteration laws and custom laws). Protect yourself! ,[object Object],[object Object],[object Object],[object Object]

1. Indian jailed for Britain's biggest credit card fraud ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

2. Busting of Fake Credit Card racket near Toronto makes this a good time to revisit Credit Card Fraud! ,[object Object],[object Object],[object Object],[object Object],[object Object]

3. 45.6 million cards hacked in biggest ever credit fraud ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Delhi Police busts credit card racket- arrested five in Delhi and UK NRI is on the run ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Florida Police: Credit card racket case:

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Florida Police: Credit card racket case: contd.. Arrested people

Distinct modus operandi of Identity Thieves ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What to do if you are victim of CCF ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

How to make out counterfeit cards: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Why people don’t report credit card frauds

Problems in fixing criminal which enhances this crime and new methods to overcome it ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

IT Act 2000 for action against CCF: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Definitions in IPC ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Definitions in IPC Dishonestly Sec 24 Fraudulently Sec 25 Counterfeit Sec 28 E-record (29A) [2(1)(t) of IT Act 2000] ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],CCF also attracts

Sections of IPC attracted for CC Fraudsters ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Problems in fixing criminal which enhances this crime and new methods to overcome it..contd (due to Criminal Jurisprudence) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Future!....If no proactive steps taken Courtesy: (Niculae Asciu)

Videos of credit card frauds tools

Conclusion ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Source Links ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Economic offenses through Credit Card Frauds Dissected

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