Entries Tagged "scams"

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Shell Suspends Chip & Pin in the UK

According to the BBC:

Petrol giant Shell has suspended chip-and-pin payments in 600 UK petrol stations after more than £1m was siphoned out of customers’ accounts.

This is just sad:

“These Pin pads are supposed to be tamper resistant, they are supposed to shut down, so that has obviously failed,” said Apacs spokeswoman Sandra Quinn.

She said Apacs was confident the problem was specific to Shell and not a systemic issue.

A Shell spokeswoman said: “Shell’s chip-and-pin solution is fully accredited and complies with all relevant industry standards.

That spokesperson simply can’t conceive of the fact that those “relevant industry standards” were written by those trying to sell the technology, and might possibly not be enough to ensure security.

And this is just after APACS (that’s the Association of Payment Clearing Services, by the way) reported that chip-and-pin technology reduced fraud by 13%.

Good commentary here. See also this article. Here’s a chip-and-pin FAQ from February.

EDITED TO ADD (5/8): Arrests have been made. And details emerge:

The scam works by criminals implanting devices into chip and pin machines which can copy a bank card’s magnetic strip and record a person’s pin number.

The device cannot copy the chip, which means any fake card can only be used in machines where chip and pin is not implemented – often abroad.

This is a common attack, one that I talk about in Beyond Fear: falling back to a less secure system. The attackers made use of the fact that there is a less secure system that is running parallel to the chip-and-pin system. Clever.

Posted on May 8, 2006 at 12:41 PM • View Comments

Counterfeiting an Entire Company

We’ve talked about counterfeit money, counterfeit concert tickets, counterfeit police credentials, and counterfeit police departments. Here’s a story about a counterfeit company:

Evidence seized in raids on 18 factories and warehouses in China and Taiwan over the past year showed that the counterfeiters had set up what amounted to a parallel NEC brand with links to a network of more than 50 electronics factories in China, Hong Kong and Taiwan.

In the name of NEC, the pirates copied NEC products, and went as far as developing their own range of consumer electronic products – everything from home entertainment centers to MP3 players. They also coordinated manufacturing and distribution, collecting all the proceeds.

Posted on May 1, 2006 at 8:02 AM • View Comments

AT&T's 1.9-Trillion-Call Database

This whole article is worth reading, but I found this tidbit particularly interesting:

He was alluding to databases maintained at an AT&T data center in Kansas, which now contain electronic records of 1.92 trillion telephone calls, going back decades. The Electronic Frontier Foundation, a digital-rights advocacy group, has asserted in a lawsuit that the AT&T Daytona system, a giant storehouse of calling records and Internet message routing information, was the foundation of the N.S.A.’s effort to mine telephone records without a warrant.

An AT&T spokeswoman said the company would not comment on the claim, or generally on matters of national security or customer privacy.

But the mining of the databases in other law enforcement investigations is well established, with documented results. One application of the database technology, called Security Call Analysis and Monitoring Platform, or Scamp, offers access to about nine weeks of calling information. It currently handles about 70,000 queries a month from fraud and law enforcement investigators, according to AT&T documents.

A former AT&T official who had detailed knowledge of the call-record database said the Daytona system takes great care to make certain that anyone using the database – whether AT&T employee or law enforcement official with a subpoena – sees only information he or she is authorized to see, and that an audit trail keeps track of all users. Such information is frequently used to build models of suspects’ social networks.

The official, speaking on condition of anonymity because he was discussing sensitive corporate matters, said every telephone call generated a record: number called, time of call, duration of call, billing category and other details. While the database does not contain such billing data as names, addresses and credit card numbers, those records are in a linked database that can be tapped by authorized users.

New calls are entered into the database immediately after they end, the official said, adding, “I would characterize it as near real time.”

According to a current AT&T employee, whose identity is being withheld to avoid jeopardizing his job, the mining of the AT&T databases had a notable success in helping investigators find the perpetrators of what was known as the Moldovan porn scam.

In 1997 a shadowy group in Moldova, a former Soviet republic, was tricking Internet users by enticing them to a pornography Web site that would download a piece of software that disconnected the computer user from his local telephone line and redialed a costly 900 number in Moldova.

While another long-distance carrier simply cut off the entire nation of Moldova from its network, AT&T and the Moldovan authorities were able to mine the database to track the culprits.

Posted on March 3, 2006 at 11:45 AM • View Comments

Fraud and Western Union

Western Union has been the conduit of a lot of fraud. But since they’re not the victim, they don’t care much about security. It’s an externality to them. It took a lawsuit to convince them to take security seriously.

Western Union, one of the world’s most frequently used money transfer services, will begin warning its customers against possible fraud in their transactions.

Persuading consumers to send wire transfers, particularly to Canada, has been a popular method for con artists. Recent scams include offering consumers counterfeit cashier’s checks, advance-fee loans and phony lottery winnings.

More than $113 million was swindled in 2002 from U.S. residents through wire transfer fraud to Canada alone, according to a survey conducted by investigators in seven states.

Washington was one of 10 states that negotiated an $8.5 million settlement with Western Union. Most of the settlement would fund a national program to counsel consumers against telemarketing fraud.

In addition to the money, the company has agreed to increase fraud awareness at more than 50,000 locations, develop a computer program that would spot likely fraud-induced transfers before they are completed and block transfers from specific consumers to specific recipients when the company receives fraud information from state authorities.

Posted on November 18, 2005 at 11:06 AM •

$5M Bank Con

Great crime story:

An ingenious fraudster is believed to be sunning himself on a beach after persuading leading banks to pay him more than €5 million (£3.5 million) in the belief that he was a secret service agent engaged in the fight against terrorist money-laundering.

The man, described by detectives as the greatest conman they had encountered, convinced one bank manager to leave him €358,000 in the lavatories of a Parisian bar. “This man is going to become a hero if he isn’t caught quickly,” an officer said. “The case is exceptional, perfectly unbelievable and surreal.”

Moral: Security is a people problem, not a technology problem

Posted on October 12, 2005 at 7:15 AM • View Comments

Phishing

My third Wired column is on line. It’s about phishing.

Financial companies have until now avoided taking on phishers in a serious way, because it’s cheaper and simpler to pay the costs of fraud. That’s unacceptable, however, because consumers who fall prey to these scams pay a price that goes beyond financial losses, in inconvenience, stress and, in some cases, blots on their credit reports that are hard to eradicate. As a result, lawmakers need to do more than create new punishments for wrongdoers—they need to create tough new incentives that will effectively force financial companies to change the status quo and improve the way they protect their customers’ assets.

EDITED TO ADD: There’s a discussion on Slashdot.

Posted on October 6, 2005 at 8:10 AM • View Comments

Automobile Identity Theft

This scam was uncovered in Israel:

  1. Thief rents a car.
  2. An identical car, legitimately owned, is found and its “identity” stolen.
  3. The stolen identity is applied to the rented car and is then offered for sale in a newspaper ad.
  4. Innocent buyer purchases the car from the thief as a regular private party sale.
  5. After a few days the thief steals the car back from the buyer and returns it to the rental shop.

What ended up happening is that the “new” owners claimed compensation for the theft and most of the damage was absorbed by the insurers.

Clever.

Posted on September 21, 2005 at 7:45 AM • View Comments

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Sidebar photo of Bruce Schneier by Joe MacInnis.