Chinese ATM criminal using Fake ATM jailed for 10.5 years..

Ten and half years for a financial crime, now that is indeed a penalty!  In Western Europe sentences for similar crimes are typically less, often a lot less ............ and according to the Shanghai Daily the man in question, a Mr Huang, was also convicted of forging financial bills and fined 50,000 Yuan ($7,143 approx).

It seems he used the internet to teach himself how to obtain card and PIN data, and then how to make counterfeit cards.  He started in 2007 after losing his job.  His initial modus operandi appeared to be the installation of skimmers into modified lobby door opening devices leading to ATMs (the door opening devices were modified by having the PIN shield removed - thereby making visual PIN compromise easier).

More recently he seems to have acquired  a fake ATM machine and installed it in Beijing.  This time the skimmer would no doubt have been fixed at the card reader, and the PIN compromised by micro camera.  Apparently people trying to use the ATM got an 'out-of-service' message on the screen.  Mr Huang is stated to have used the fraudulently acquired data to make 31 counterfeit cards, thereby netting himself 127,600 Yuan ($18,229 approx).  According to a plan found by Police on his computer, his target was to make 500,000 Yuan ($71,429 approx) over a 10 day period.

This form of scam is well known in the USA, and has occured in Europe - what is noteworthy of this one is that a self-taught individual perpetrated the crime......seemingly in isolation.  While the total sums involved may not seem a lot to those hardened to published financial crime loss information in the West,  in China the sums represent an awful lot of money to the average person.

Mr Huang has been sent to jail for over 10 years and also fined just under half the amount he stole - which possibly means that he will leave jail with debt (although he is appealing against the fine).  For those frustrated by the apparent leniency of penalties for similar crimes in Europe,  it may be of interest to monitor China more closely to see if related crime levels remain lower...............read the full story in the Shanghai Daily here

UK Public sector loses £21 billion in fraud, 55% of the overall annual total..

According to the Annual Fraud Indicator just published by the UK National Fraud Authority (NFA) it seems that £38.4 billion was lost to fraud in the UK last year and of this a staggering £21 billion (55%) is due to losses in the public sector.  By comparison £12 billion (32%) was lost by the private sector, £4 billion (10%) by individuals and £1.3 billion (3%) by charities.

I am not at all surprised by the way that the NFA has presented these figures, a public sector organisation it seems to be trying to downplay the significance of the public sector fraud losses by saying that 'in part it is due to more diligent reporting by the the public sector'.   I'm still spinning from that one (excuse the pun!). 

The published UK budget deficit (ONS) for December 2010 is £16.8 billion, with total net debt of £2322.7 billion.  In this age of austerity, significantly reducing public sector fraud losses would make a huge impact on the budget deficit, thereby reducing the needs for cuts elsewhere.

The financial services industry is possibly the most diligent in trying to drive down fraud losses by investing in fraud prevention measures, and has seen some great success, partly due to the roll out of 'Chip and PIN' or EMV cards and terminals.  The industry lost £3.6 billion (included in the private sector loss figure).  The good news is that this figure was down slightly on the previous year's figure of £3.8 billion, thanks to improved fraud prevention methods involving plastic cards - resulting in a cut of £440 million - and cheque fraud - £30 million.  In contrast, online banking saw an increase of 14%, to £60 million. The NFA attributes this to criminals using more sophisticated methods to target customers through malware and a spike in phishing incidents.

It would be nice if the UK public sector would take the lead from the financial services industry and become more diligent in tackling fraud, by investing more effort and money, to seriously tackle its massive annual fraud loss figure........thereby (hopefully) reducing the austerity squeeze on the long suffering tax payer.  You can download the NFA Annual Fraud Indicator here

ATM Security on Facebook

The European ATM Security Team (EAST) has just put a page up on Facebook.  This is something aimed at everyone, not just a specialist page for those in the industry. 

How much do you know about using an ATM safely? If you want to know more, then this is the page for you........join it if you want to find out more and also to put your own views forward.

Find it at http://www.facebook.com/pages/European-ATM-Security-Team-EAST/169872763057039

One third of UK adults are victims of card fraud..........

According to the annual Card Fraud Index released yesterday by life assistance company CPP, Card fraud has now affected a total of 13 million people in the UK during their lifetimes.

But there is some good news.  2010 saw a three per cent reduction in the number of card fraud incidences with seven per cent of people saying they had suffered from card fraud in the last 12 months compared to 10 per cent in 2009.  However, card fraud is still a problem and people need to remain vigilant and take responsibility when using their cards.

The Card Fraud Index also reveals the methods criminals are using, with most victims (20%) having the magnetic stripe on their card cloned at an ATM or via a payment terminal.  This is a three per cent increase on 2009. One in five victims have been defrauded online with criminals using the internet to obtain card details.

Alarmingly a third of card fraud victims (33 per cent) don't even know how they became a financial victim, with a third hearing directly from their bank (34 per cent) and six per cent being refused money at an ATM. A further six per cent found out when their card was refused at point of sale.  Victims of card fraud reported the average amount stolen was £417 with one in 20 (four per cent) reporting losses of more than £2,000.

According to Nick Jones at the CPP blog it seems that younger people are most at risk.  Card cloning or counterfeit fraud is the most dominant type of fraud.  The research shows that:

•    18-24 year olds tend to be the least security conscious overall only 37% checking their bank statements on a regular basis, verses 67% of people aged 65+,

•    This younger demographic are also more likely to not shield their PIN number at an ATM and check an ATM for tampering, but let others shop online with their cards and share their PIN details with other people.

Don't be a victim of card fraud!  Below are some card fraud prevention tips from CPP, and for more information on the above see http://www.cpp.co.uk/ or http://blog.cpp.co.uk/

Top tips from CPP to help avoid being a victim of card fraud

1) Don't carry multiple debit/credit cards in a wallet – only carry the essential cards you need
2) Don't leave belongings unattended while shopping
3) Don't carry debit/credit cards loose in a bag or pocket
4) If your cards are registered with a Card Protection company make sure you have their emergency loss reporting number
5) Don't ever write down your PIN number
6) Don't let a shop assistant take your debit/credit card out of sight – they could be copied or cloned
7) Don't let someone else take money out on your behalf
8) Check your receipts against your statements when you get home
9) If you are concerned your cards may have been lost or stolen, contact your bank immediately to get the card cancelled
10) Make sure your bank has up-to-date contact details for you, including your mobile phone number in case they need to check if transactions are genuine.

How much do you know about payment card fraud?

In this day and age most of us carry plastic payment cards (credit/debit) in our wallets.  These cards are attractive to criminals because stealing or copying them can lead to financial gain.  When using an ATM, as has already been mentioned in this blog, protecting your PIN is one of the key steps to protecting the integrity of your card, as is being aware of your personal space.  But what about a more holistic view of card protection?  What are the risks to your card when shopping in a retail store, by telephone, or online?

The Irish Payment Services Organisation (IPSO) has set up an informative website called 'SafeCard' (http://www.safecard.ie/) to raise awareness about the harmful effects of card fraud.  The site is aimed at providing advice to retailers (risk prevention), cardholders (top tips) and the media (facts and figures).

Cardholders can get advice and best practice information on the following topics:

• Lost & Stolen Cards – General Safety Guidelines
• Counterfeit and Skimmed Card Prevention
• Be Safe at the ATM
• Tips for shopping by mail, by phone or on the Internet
• Securing your card when shopping on the internet (with 3D Secure)
• Identity Theft – Tips to Keep Your Identity Safe from thieves
• Phishing – when you receive an email that looks like it has come from your bank
• 419 Fraud – when you receive an email claiming that you’ve won the lottery
• Keeping your cards safe when travelling abroad
• Problems using non-Chip & PIN cards
• Frequently Asked Questions

This website is an excellent reference point for all Cardholders and is well worth visiting and sharing - who do you know who carries payment cards in their wallet? - pass it on.......................................................

Hygiene risks at ATMs?

Here's a new take on ATM security.......this morning on BBC Breakfast television in the UK they reported that some scientists in the UK have taken swabs from various locations, including ATM keypads and buttons, to test for various forms of bacteria and other nasty things.  It was reported that the areas they tested were found to be as bad, or worse, than toilet seats.  Even the things that cause MRSA were found.  Ugh!  Still it will make me think when using ATMs and other PIN entry devices, particularly right before a meal.  Here's a new ATM security tip (tongue in cheek)......wash your hands as soon as possible after using one!

Why ATM anchorage matters....

Watch the video below to see a bungled ATM attack in the UK (courtesy of Greater Manchester Police and the Telegraph Online) - not only did the bad guys fail, they were subsequently arrested and imprisoned.  It looks as if the ATM may not have been pulled completely out of its anchorage.  A properly anchored ATM will withstand repeated brute force or pull-out attacks.  One provider of proven plinths is Acketts Group.  Visit their website to see a promotional video of a properly installed ATM resisting a sustained brute force attack for nearly 10 minutes..............