bought with a stolen or fake ID credit card) accounts for about a third of cases, fol- lowed by counterfeit money and credit card fraud.
Driven by digital technology, fraud is
the fastest growth crime in the world and is being fingered as the biggest issue facing law enforcement today – bigger than even illegal drugs. Getting rich quick used to involve a
sawed-off shotgun and a bank heist, says Imam Hoque, founder and chief technical officer of Detica NetReveal, a United Kingdom-based security conglomerate. “Now it’s sitting down in front of a computer screen,” he says. “Unlike bank robbery, you aren’t likely to get caught or go to jail.” He says there are three main areas businesses face attack: the insider, who ei- ther acts alone or with an outside accom- plice to divert funds or data; general fraud through phony invoicing or “skimming” of PIN numbers at point-of-sale locations; and e-crime, which involves penetrating the digital defences of a corporate network. “The first thing we ask when we’re working with a new client is whether they know who they’ve hired,” says Hoque. “You’d be surprised,
for example, how
many people who are working for the tax departments of governments have tax is- sues of their own.” Technology systems can monitor why some employees are overly active at cer- tain times of the day – just before lunch or quitting time, for example, or why an em- ployee, who signed out for lunch suddenly signed back into the system from an out- side IP address in a different time zone. For Hoque, there’s no substitute for the personal touch.
For retailers, point-of-sale skimming – tapping into or replacing POS credit/debit card machines to capture PINs and card details – are becoming a real nightmare, says Al Vonkeman, executive director of Alberta Crime Prevention and a former member of the Edmonton Police Service. The data gleaned from these skimming scams is quickly “sold” to a market of global cyber gangs that are adept at con- verting personal data into cash and gen- erating fake IDs that in turn are used to acquire bank loans or credit cards. “They’ll target POS machines at re- tailers, often working an entire mall,” he
WWW.SECURITYMATTERSMAG.COM
“WE ADVISE RETAILERS TO TRAIN THEIR PEOPLE TO CHECK THEIR
TERMINAL AT THE START OF EVERY SHIFT AND AGAIN AT THE END TO ENSURE THE SERIAL NUMBER IS CORRECT. THESE GUYS LIKE TO COME IN AS THE FIRST CUSTOMER OF THE DAY AND SWITCH AS THE
STORE IS OPENING AND THEN COME BACK
AT THE BEGINNING OF THE NEXT DAY.”
says, pointing to the example of a West Vancouver mall case in 2007 when at least 200 people were stung by such skimming. “They work on the premise that most people don’t check their statements more than once a month and even then not closely.” The Vancouver case was a classic example where the terminals were ex- changed for tampered terminals that had a memory chip inside to collect data, which was later extracted when the gang returned to replace the originals. “We advise retailers to train their people
to check their terminal at the start of every shift and again at the end to ensure the se- rial number is correct,” he says. “These guys like to come in as the first customer of the day and switch as the store is opening and then come back at the be- ginning of the next day.” Retailers and restaurants no doubt compete for customers, Vonkeman says, but they should share information about fraud attempts because it is likely crimi- nals working a geographic area will hit similar outlets.
“They should talk among their own stores,” he says noting once crooks get their hands on a specific terminal they will look to see where they can put it in play, usually working a chain retail or restau- rant. “I’ve had cases where they didn’t
even tell their own people in different stores what was happening.” While digital fraud (e.g., phishing) is the fastest growing type of fraud, many of the scams are rooted in the old fashioned, tra- ditional rip offs, such as the phony invoice or dubious business director trick in which companies are duped into paying for goods they never ordered and sometimes never received or for a listing in a tele- phone directory that never gets published. And while many of the online schemes involve boiler room operations in such countries as Nigeria, Ghana and eastern Europe, Canada is not immune to home- grown activity. In April, Canada’s Compe- tition Bureau laid criminal charges against three brothers in Montreal, Que., for de- ceptive telemarketing activities related to business directory scams targeting busi- nesses and not-for-profit organizations in the United States, France and the United Kingdom. The Bureau says the brothers gener-
ated about $60 million in revenue be- tween 1999 and 2004 alone. Ian Nielsen-Jones, assistant deputy commis- sioner at the Competitions Bureau, says fighting fraud and scams entails more than empowering staff to question and flag anything they don’t like. “You can refuse to receive it at the ship- ping dock, or call the company in the in- voice and question them as to who placed the order and why,” he says. “But most companies don’t report it and just take it as a lesson learned. That’s a mistake be- cause they’ll be back in six months.” Other schemes are varied and
colourful. From offers to “procure” gov- ernment
loans, which turn out to be a
freely available list of programs, to worth- less franchises to recruitment promises, the only common theme is the plan to grab the money and run. Including yours!
Ian Harvey is a freelance writer in T
SOURCES
Alberta Crime Prevention •
www.accpa.org Competition Bureau Canada •
www.competitionbureau.gc.ca
Detica •
www.detica.com PhoneBusters •
www.phonebusters.com
oronto, Ont.
MAY/JUNE 2010 • SECURITY MATTERS 23
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