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Nowadays Ukraine traces through the tendency of increasing the damage caused by crimes in the sphere of bank technologies. According to the
statistics for the period of 2000 –2001
77% of the whole damage caused
by economic crimes has the direct
bearing on commercial banks’
activity. Only in the sphere of credit
bank activity the level of swindle in
Ukraine exceeds 4-5-fold the average level in the world (most of them fall only
on Kiev and account for 80 %). The crimes committed by the use of plastic payment means can be
placed among the most dangerous economic crimes, for they make a negative impact
not only on a bank’s activity but on the other subjects of economic sphere as
well. Such kind of crimes imply the
crimes including the corpus delicti stipulated by the Criminal Code of Ukraine in
Articles 190, 200, 361 [1].
Appearing
of the plastic payment
cards in the system of clearing
settlement has produced a new kind of crimes. High-grade market of
plastic payment cards in Ukraine has not developed yet, but the situation is
definitely to be inclined to it. So it
is at least thoughtless to underrate danger of the crimes and abuse in the
system of clearing settlement .
The financial and legal security of banks and their
customers and its development as well are impossible to be considered out of
touch with the methods of illegal
operations with plastic payment cards. They single out 9 main types of crime
among these operations:
1.
Operations with counterfeit cards.
2.
Operations
with stolen or lost cards.
3.
Multiple payment for services and goods .
4.
Fraud
with post and telephone orders.
5.
Multiple
withdrawing a bank account.
6.
The swindle with counterfeit slips.
7.
Fraudulent use of cash dispensers while serving out cash.
8.
Connecting up an electronic recording device
to a POS-terminal or cash dispensers (“Skimming”).
9.
Other kinds of swindle.
Each of the means mentioned
above calls for special characteristic.
1.Operations with
counterfeit cards. The most part of losses in
the payment system falls on this type
of swindle. Considering high technical and technological protectability of real
payment cards the counterfeit cards
have been rarely used recently and they can be determined by means of simplest diagnostics. As a rule, to forge
a card
they use stolen intermediates of
cards where essential elements of a bank and a customer are applied. Having up-to-date equipment criminals can apply some information even to a
magnetic stripe of a card or copy it in other words perform counterfeits on
a high level.
The
mechanism of swindle may be various: a
swindler legally receives a usual card at a bank, deposits a minimally required
sum on a special card account. Before
or after that he procures the information about the owner of a plastic payment card of the very company, but with more considerable sum
and inserts new data in his
card. To commit this type of swindle the criminal must pick up some information about code numbers, a
surname, a name patronymic name, an
authorised signature, etc.
There are various ways
of fulfilling such kind of swindle:
·
changing the information on a magnetic medium;
·
changing the information extruded on the outer face;
·
using both above mentioned means;
·
forging the signature of legal owner of the
card.
When forging a signature several variants are used, but it is taken into
consideration that the authorised
signature is impossible to delete, for
on making an attempt to do
this the word VOID – “invalid” will appear in the signature field. So it is often painted over white.
The signature field happens to be changed into
new one using an adhesive stripe
of paper [2].
To apply the obtained information about the owner to a
magnetic stripe even earlier was not a
big problem from the technical point of
view. The data were simply input on the
principle of tape recording in
an appropriate format. When they
began to protect the issuers by means
of coding the record, skimming appeared that is thorough and entire coping
the whole content of magnetic tracks.
Holograms and emblems produced
on the technology of gitter are not
effective protection as
during a routine process of identification they are usually paid less
attention to than signatures and other
personal essential elements. The information
extruded on the outer face can
be changed in different ways.
Letters and figures extruded on the card surface can be cut out by
criminals and changed into others by means of glue. Thus absolutely new name and surname appear on the card.
One of the most dangerous means of
plastic cards counterfeit is production of entirely false
cards. The method of entire coping has
been widely-spread in some East-European countries. Such means is often used by organised criminal groups where, as a rule, workers of restaurants or other service
offices involved. The latter are used
for gaining the information about credit cards which fall into their hands when having restaurant bills or
other services paid as it has been
mentioned before, when the card falls
out of touch with the customer for a while. And when it is returned back, its
“twin” card is left at criminals.
There is one more dangerous
method – the method of “white plastic card” (WPC) – which can be related to
this type. Counterfeit of a plastic card demands an expensive
technology, for the amount of outer protection levels of original cards
(thin line figures, guilloched layer, holograms, photographs,
ultraviolet pictures) are more and more increasing from year to year. WPC imply
the use of a piece of clean plastic in the form of a usual card where
real data (the number of a real account, the period of validity, a surname,
etc.) are applied to.
Then the card is used by an
owner of a service office who is also
involved in the criminal group. The shop owner
fulfils a fictitious turnover, send to the issuer bills to pay, and
shares the profit with his accomplices.
Having picked up a PIN-code , “white cards” may be used to commit
misappropriations by drawing out
cash through dispensers which don’t
compare and don’t check a
signature, a photo and other attributes of a card.
Credit card information used to make plastic counterfeit cards may be collected in different countries. Information from the USA, European
countries and from the Asian region as well are used more often. Criminal
groups working in different regions exchange such information.
2.Operations with
stolen or lost cards. Swindle use of stolen cards is
still the most widely-spread
crime. The methods of counteraction to thefts and swindle use of
plastic payment cards have been perfected for years but at present companies prefer to produce cheap cards to
cut down possible losses caused by their illegal use. When the sums of
losses abruptly increase, companies undertake urgent
measures to introduce new safeguards.
To cause large damage on a
stolen card is possible in case the swindler
knows PIN-code of a customer.
Then it is possible to pay out a
large sum from the customer’s account
through the net of electronic cash
dispensers before the bank-issuer of a
stolen card manages to insert it into
the electronic stop-list ( the list of invalid cards).
The given method is characterised by
capturing the plastic payment card
as a result of a its theft from
an owner by means of burglary,
theft in the transport or other places, and
also as a result of owner's
losing s card after he has acquired and signed it at a bank .
The peculiarity of swindle in
case a card is stolen when being sent
by post is that the owner does not know about
the loss of the card, he does not
suspect that he has his card stolen.
It quite difficult to prevent
theft in this case. Such means has not spread in Ukraine yet. The matter
is that in the USA, for example, when changing a residence the owner of a
credit card can turn to the company-issuer with the letter of inquiry to get
the copy of his card to a new address.
A malefactor fabricates
a letter of advice about the
credit card owner's changing a
residence, and send the card to him by post. The stolen card in
this way may be used by the thief himself or
he can sell it to another malefactor. It is one more means of
penetrating the stolen credit cards
into a country.
Letter-boxes in apartment houses
are favourite objects for credit
card hunters. Criminals are often
informed about the time of new credit card delivery. Following the post-man the theft waits for the former
to drop the correspondence into the mail-box and leave, then he takes out the content. Investigators call this type of theft “ a slow passer-by”.
Many organisations producing
cards use registered letters for delivery because of considerable losses caused by post
theft. A preliminary letter of advice about forthcoming of a card delivery may
be used as an additional preventive
measure. Sometimes such preliminary letter of advice may combine with the system of
so-called “double dating”. In this case the card becomes valid a month
later after the delivery date. In
case the card is not received this period of time is sufficient to inform about
its loss and enter the card in the stop-list. Some organisations producing cards
demand the receiver to necessarily
inform them about his having the card delivered.
If the member of a criminal group
has the chance to introduce himself into the post office, he gets unique
opportunities to steal the cards sent by post, which he then delivers to his accomplices. Thus, perfecting the ways of
correspondence delivery combined with
higher measures of mail
protection contributes to decreasing the plastic card thefts.
According to international experts’ estimations the most powerful mafia
specializing in plastic business include
natives of Nigeria. According to the information of Interpall there are at
least five large centres on training
the professional swindlers. Having
learned the ways of swindle the
“graduates” of these schools
are sent to European countries. They are met here, taken on the staff, as a
rule, for a job of a cleaner in big companies. The task is quite definite that is to collect information about a certain person owning a considerable
fortune.
Companies producing cards usually have
non-stop service to be informed
about the loss of cards.
When receiving the message the
customer’s account is blockaded and any further use of the card will cause
carrying out the investigation.
Sometimes the unusual number of transactions may result in stirring up the computer system signalling
before it is known about the theft of a
card. We have carried out the research and come to the conclusion that messages about card loss may
be received by the company even 3-4 days after its disappearing, and in case of using the counterfeit card the swindle may be revealed even 30-40
days later [3].
Companies regularly publish bulletins
listing the card numbers to
be withdrawn and send so-called stop-lists
to the sellers. Some shops
have special machines (point of sale) -
computer terminals enabling to
check the state of a client’s account before concluding a
bargain. However, the possibility of fulfilling the method under consideration is connected with the fact that
law-enforcement agencies and shops
are still badly equipped and there is no single card index of stolen
credit cards. Stop-lists are not always
received by trade organisations in proper time.
The most difficult case for investigation is the agreement among
salesmen or between a salesman and a customer. For instance, two
salesmen can cooperate, exchange the
lost or stolen cards to carry out the
fictitious transactions. The
salesman may also register the sale of
an article to a swindler, but for all that
it is left at the salesman, and the sum paid by the financial
establishment is shared between them in
agreement. The cashier is usually offered 10-20% by cash from each operation.
Sometimes the cashiers come into criminal agreement with swindlers
because of seeming impunity of the criminal
transaction. Still the only financial document confirming the operation
with the plastic payment card is a slip
where essential elements of a
plastic card are left after a usual rolling.
However, it is practically
impossible to find out “by eye” whether they have been accounted from the real plastic card or simply from a
piece of plastic with extruded data.
This is the matter swindler use.
There is one more kind of
swindle which implies the presence
of a dishonourable salesman or some
other person having the telephone number at his disposal to
check the card. The bell allows to find
out whether the card is on the list of
stolen cards or not. If not the
dishonourable salesman may carry out
the fictitious transaction on a large
sum through his company. If the card is
inlisted stolen, he can make several transactions within the settled limit.
Criminals dispose numerous ways of using stolen cards. Organised criminal groups pay 100-500 dollars per a stolen card depending on some factors:
availability of a signature, how long ago it was stolen, if it is in the
list of stolen cards, the period of its use by a legal owner, whether the limit
is used up, if there are any extra
documents identifying a person.
In most criminal organisations a
thief sells a stolen card to the
“supplier” who has a sufficient number
of accomplices to use it. The members
of the group do shoppings by means of a
stolen card according to the list
settled by “a supplier”, seeing to that the price of the purchase will not
exceed the limits settled by the salesman. The purchased
things are sent then to the stolen goods
dealer for sale.
The person having a direct
bearing on a swindle operation with the card
usually gets 40% of the profit, or he is allowed to use this card to do
his own shopping before he gives it back to the “supplier”.
3.
Multiple payment for services and goods
on the sums not exceeding "floor limit
" and demanding to fulfil no authorisation. To make the calculation the
criminal needs only to forge a client’s
signature. However, cash money as the
most attractive object of abuse becomes
inaccessible at the given schema. Crimes with cards stolen while being sent by
the bank issuer to its clients by post
may be attributed to this category.
Committing the misappropriation
by counterfeit on the credit cards of the banks settled
a considerable limit of a marginal sum of the operation being
fulfilled without authorisation. The
swindlers repeatedly use a marginal limit of the sum during a day in different service offices and shops. For example, some respectable London banks fix a marginal limit in 200 pounds and reiterated use of such sum will bring the considerable sum
to the swindler.
To determine the unused part of the credit on the criminals resort to a simple method.
They ring up to the registration centre
of the company and ask to authorise a transactions, for example, on 3000 US
dollars. When refused they reduce the sum up to that limit till they are
allowed to. In a while they ring again
and ask to cancel a transactions. Due to all these they have the sum on the given card which has been
beforehand already allowed to be
paid. It is of no difficulty to obtain the numbers of valid cards. For this purpose they use the items of
information picked up by means of
hotels or restaurant staff, with
the help of accounts carelessly thrown out, car release agencies etc.
One more method to commit swindle related to the given
method is the use of a plastic card
with the criminal purposes by the card owner himself who having done large
operations on a card (more often with cash dispenser) can declare that the card
was stolen. In such cases accomplices happen to be involved in order to avoid a
possibility of authentication.
4.
Fraud with the mail / telephone orders.
This kind of crimes has appeared as a result of progressing the service of
goods and service delivery by
mail or telephone order of a customer. Knowing number of a his “victim’s
“ credit card the criminal can indicate it in the order form and escape having received an offer on the address of a
temporary residence. This method is applied to obtain expensive goods such as
computer and electronic equipment etc.
This kind of fraud in the field of
telemarketing is usually called "inbound". The cards numbers can be
found out by means of the shop and restaurant staff , from the computer reports
etc.
Swindle
use of credit cards numbers contains a
wide set of methods such as fraud through a system of telemarketing and
telecommunication. The number of swindle methods is numerous and has been increasing from day to day because it is not
required to present a card to make an order by mail or by telephone, it is enough to notify its number. The abuse in the sphere of telemarketing
implies the non-authorised bargains committed
by telemarketers-swindlers and also criminals dealing with real
telemarketers and
companies taking orders by mail.
The swindlers-telemarketers
participate in undertaking frauds in the field of telemarketing such as
"outbound" kind. By different methods these criminals find out original numbers of cards and use them when
invoicing the counterfeit accounts for orders the payment on which is daily
entered in a bank account of a telemarketer. As the majority of banks have fixed the same procedure for the order
accounts as for cash, the telemarketer
has a possibility to transfer money to another account immediately or daily withdraw money from the account. When the crime is disclosed, the telemarketer-swindler usually escapes together with the
money.
New
variety of such kind of fraud is the use of
Internet for an electronic system of
orders on different goods. However, today there are about 30 kinds of illegal operations with
plastic cards through Internet:
· payment by non-existent cards;
· creating the false virtual shops;
· "electronic" theft;
· false payments in gambling establishments etc.
5. Multiple
withdrawing a bank account. As a rule, the mentioned crimes are undertaken by workers of shops and service offices taking payments from
the customers for goods and services on
credit cards and by means of registration committed some payment cheques at one stroke. According to the cheques presented the company has been accounted bigger sum of
money than the price of the goods sold or the service done. However, on concluding several
bargains the crime is made to
close out or abandon the
company.
The indicated
method is characterised by the staff of
restaurants, cafe, bars, motels
being involved in swindle operations.
Workers of such companies making use of the customer’s carelessness or deliberately diverting his attention make some additional slips of plastic cards which are used then to misappropriate material values and
money.
The key moment in this method is that
unlike a shop where a card calculation is accomplished in the
owner’s presence, in restaurant the
waiters take it away for a while and then return it with the bill. At that the
card owner does not suspect that the slip (reprint from a card) presented to
him as a bill or the slip together with a bill
is only one of several slips skilfully-made by cashier or waiter. The absence of a date is the only thing that
distinguishes it from other slips.
Within
following several days the cashier can misappropriate cash money obtained
from other customers having shared
with the waiter, meanwhile he can safely attach the accounts with the essential elements of the card
owner to the reporting and send them to
the office of issue (a bank or a payment system) for paying.
But for all that for repayment Thus the governing body of the company can remain in ignorance of the
fact. To avoid such operations owners
of payment cards are recommended to be more careful about the documents even when
signing them to make a deal with inconsiderable sums.
6. The swindle with
counterfeit slips. The given way has
considerably spread under complicity
of shop cashiers. The essentials of the method can be reduced to
the use of deliberately counterfeit slips made by means of applying false cliché or type-setting printing forms using the
information from the original plastic cards. In this case the card is mostly
used without its legal owner’s
knowledge who does not admit the fixed
expenses after the stated fact.
Accomplices
of the crime give the cashier a beforehand-made slip containing the
information about the card number, the owner’s name and the period of validity,
which the cashier is to arrange
fixing the data about the
service office where the slip is
registered. After having cash money
for some goods paid to the cashier,
the sum received in cash money is
indicated on the false slip. The slip
is attached to the account, the money
is seized and misappropriate by the
criminals.
7. Fraudulent use of cash
dispensers while serving out cash. Let
us consider the use of cards while having cash money being paid out from the
Automated Teller Machines (ATMs).
Canada has
more than 2,000 money access machines in operation and their quantity is
more and more increasing. Some
financial companies produce special cards to be used in automated teller
machines, meanwhile some machines can use only coded bank cards like Visa and Master-Card. At any rate the card is
used with the personal identifying
number (PIN-code) to access ATM.
The PIN-code is known only to the owner of the card
who is recommended to remember his number and he must write it down on the card
by no means. Otherwise when stealing
the card the criminal obtains the personal code as well, that considerably relieves committing the crime.
The main advantage of introducing automated teller machines is their
great reliability and productivity
compared with an alive cashier, that makes it
more convenient and safer for
widespread rendering services to the population. Despite it criminals
successfully descend on automated teller machines using force methods (burglary, complete destruction, etc.) as
well as swindle actions. In most cases they use an original card and a real personal code obtained by criminals
as a result of theft from a legal owner or from the financial company in a deceitful way. Swindlers are known to call the person who has lost his card, and
introduce themselves as bank
inspectors. As if to check the
registration of the card they ask to tell them the personal identifying code, that makes the account easy to access for theft
by the use of an automated teller
machine. It often happens that this method
involves the swindle means dealing with the use of bank officers’
service to get from them the information about
cash deposits, about owners of credit cards with large deposits for bribe.
Till recently getting money through the cash
dispensers has been one of the most reliable and secure ways of using the plastic payment cards, for availability of PIN-code known only to the
user guarantees identification of the
card owner and confidentiality of the customer’s access to the account.
However, international practice has already fixed the cases of large
swindle through cash dispensers.
8. Connecting up an
electronic recording device to a
POS-terminal or cash dispensers
(“Skimming”). This type of swindle showed up not long ago
and it has been fixed only in Hungary in view of considerable technical complexity. The given kind of
swindle is characterised by complete copying the whole content of a magnetic stripe from the plastic payment
card.
Restriction for
a sum of money (some hundreds of dollars) which can be paid out by a
cash dispensers during a day seems to be the main factor to cut down losses.
One more preventive measure is a special computer
programmes controlling the automatic pay machine. All the information the
automatic pay machine exchanges with
the central computer with is coded to
prevent the opportunity of connecting
up or intercepting the information [4].
Suspiciously frequent paying out money during a short period of time or
wrong named personal code can
bring to “pocketing” the card by the automatic pay machine.
9.Other kinds of
swindle. Other kinds of swindle can be related to
various combinations of swindle methods mentioned above, newly appearing or
those swindle methods which has not been
studied yet.