E-commerce, Retail and Technology: Payments and Fraud

People are an important retail fraud protection tool!

As this <a href="http://www.phillyburbs.com/my_town/bensalem/woman-jailed-in-stolen-credit-card-scam/article_5d5425f8-c189-50c1-ab36-a9670da64e8c.html">story</a> shows, people are an important fraud protection tool for retailers. 
 
You should not under-estimate the power of motivated staff to stop or report fraudulent actvity. 
 
In order for this to work you should consider these: 
 
1. Do your staff have a confidential way to report potentially fraudulent activity such as an outside whistleblowing hotline like <a href="http://www.expolink.co.uk/WhistleblowingHotline.aspx?gclid=CLP7qMy6iqoCFUFC4QodtihH0A">Expolink</a>? You may fall back on the old line that they should report it to their line-manager, however you should consider that collusion is often found in retail fraud and that the line manager may be in collusion with the activity and therefore take action to protect their position. Which may give your business the double-whammy of suffering fraud and then firing honest staff who tried to prevent it! This is one area where lines outside of the business makes sense. 
 
2. It is probably not appropriate to offer rewards for this activity, afterall you don't want to incentivize mis-reporting against unlike bosses, however it is still important to acknowledge how difficult it is for someone to report a colleague for potentially fraudlent activity. If they get it wrong they are possibly putting their own job at risk, so low-impact recognitation is appropriate. For some wider discussions on rewarding whistleblowing see <a href="http://www.pcaw.co.uk/policy/policy_pdfs/rewardingwhistleblowers.pdf">here</a>. 
What do you think, how would you reward a whistleblower? Afterall its probably easy to define the loss and therefore the predicted loss if you were not made aware of it. If for example someone generated an extra £2000 income, you would probably reward them, so why not if its preventing a loss?

People are an important retail fraud protection tool!

As this story shows, people are an important fraud protection tool for retailers. You should not under-estimate the power of motivated st...

American Express History

Unknown 0 Payments and Fraud 1:09:00 PM

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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikAk4j9pUsK68Mqs-AO28jebIzC0qhBFCLc8yc9eMWmoZGAkysLy3WGMkykrBydHWTjAxW3kPgEQqjNjCJA0NtgVOOBw4eIDluWFAtqPpRN_FyY-v8d9QsbJ3F_Fz6yCfsxPPTSR5m99Y/s1600/amex_by_Images_of_Money.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikAk4j9pUsK68Mqs-AO28jebIzC0qhBFCLc8yc9eMWmoZGAkysLy3WGMkykrBydHWTjAxW3kPgEQqjNjCJA0NtgVOOBw4eIDluWFAtqPpRN_FyY-v8d9QsbJ3F_Fz6yCfsxPPTSR5m99Y/s1600/amex_by_Images_of_Money.jpg" /></a></div>
 
The blue trademark and gladiator logo are recognized worldwide as symbols of 
financial security,payment flexibility and superior customer service. With 97 
million cards in use, American Express cardholders spent $822bn (£522bn) in more 
than 200 territories in 2011. Undoubtedly the infamous celebrity only Black 
American Express card is the most desired financial instrument in the 
public consciousness.

The brand offers an array of payment, 
expense-management and travel products for consumers and businesses, including 
credit and charge cards, travel, home and car insurance, its Travellers Cheques 
and foreign exchange services. 
 American Express was formed in 1850 
from the merger of express mail companies Wells & Co, Butterfield, Wasson 
& Co and Livingston, Fargo & Co. The freight company provided safe and 
speedy transportation of bullion and bank notes across the US. 
 Like lots of innovation a major shift 
was born out of frustration, a move into secure financial transactions was 
prompted by a visit to Europe by its then-president, JC Fargo, in the late 
1880s. As was common at the time, Fargo took letters of credit to facilitate 
cash advances. However, he was frustrated to find that he could do so only in 
major cities. As a consequence, the company launched its Travellers Checks. It 
remains the biggest issuer of them by volume. 
 Although the company had considered 
launching a charge card in 1946, it did not do so until 1958, by which time 
rival Diners Club's operation had been running for eight years. 
 However, interest was so great that 
AmEx issued 250,000 of its paper cards prior to launch, despite levying a $6 
annual charge – $1 more than Diners Club, to give it a premium positioning. 
American Express has never been interested in copying rivals and are happy their 
product, service and indeed Merchant Fees are different to the almost 
indistinguishable Visa and MasterCard. Another year passed before users could 
put their purchases "on plastic", with the introduction of embossed plastic 
cards.

The classic 
green card was just the start, as AmEx began to segment its customer base with 
different cards for the more-wealthy. In 1966, it launched the Gold Card – the 
invitation-only Platinum Card followed in 1984. Each had its own fee structure 
and associated benefits. A tie-up with <a href="https://sync.americanexpress.co.uk/Foursquare/Index?AspxAutoDetectCookieSupport=1" target="_blank">Foursquare </a>is intended to help build the importance of the 
physical card in the virtual world showing that they keep innovating allowing 
customers access to local special offers. TIMELINE 1850: American Express was 
formed. 1891: The company launched its 
Travellers Cheques. 1920: It made pound sterling Travellers 
Cheques available. 1958: American Express launched its 
first card, which was purple and made of paper. 1959: It introduced a plastic card in 
the US – an industry first. 1975: David Ogilvy coined the brand's 
'Don't leave home without it' line. 1981: American Express introduced its 
Gold Card in the UK. 1987: It launched its 'Membership has 
its privileges' campaign. 1993: The Membership Miles (now 
Membership Rewards) scheme was introduced in the UK. 1997: The brand formed a partnership 
with designer Alexander McQueen. 1999: It made the ultra-exclusive celeb 
black Centurion Card available to customers in the UK. 2000: The co-branded British Airways 
AmEx Card was launched. 2004: American Express rolled out its 
global 'My Life. My Card' campaign. 2012: It launched a partnership with <a href="https://sync.americanexpress.co.uk/Foursquare/Index?AspxAutoDetectCookieSupport=1" target="_blank">Foursquare</a>.

American Express History

The blue trademark and gladiator logo are recognized worldwide as symbols of financial security,payment flexibility and superior custome...

Unknown 0 Payments and Fraud 2:50:00 PM

<a href="http://www.propertytribes.com/">Property Tribes</a> asked me to post my thoughts on Fraud in Private Property Sector. 
 
 
There are a number of things that are different about the landlord-tenant relationship.
One is that usually this is a one-off transaction, apart from renewing a lease, any tenant is unlikely to ever do business again, unlike say an ecommerce site or a financial transaction where a history of previous transactions are easily available to be fed into the risk assessment of future transactions.  
 
 Showing a rental property is also a face to face transaction, here factors that come into play that may not otherwise, you may not want to seem rude by questioning a person’s integrity right in front of them or their partner/family, but that is what you need to do.  
 
 A good tactic is to apologise for doing the checks but blame on someone else (even a fictional someone), the Finance Director, Your Partner, insists that you do these checks even though you don’t think it’s necessary as you can see the potential tenant is a stand-up guy, it’s not your choice you have to do the checks, and then carry out the checks!
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Some basic rules still apply you need to look at the risk of the transaction, apart from the odd chipped cup, the risk on a rental agreement is quite high and hard to replace lost funds. 
 
 Ask yourself this if you lose a month’s rent then how long does it take you to earn this back, three, six or twelve months? That will define the risk. A car dealer can sell other cars to make up for one fraudulent sale, as a landlord unless you have many properties the months rents is gone and needs to be made up from the same property, one bad transaction can probably ruin your year.

Once you assess the risk, look at steps you can take. Here is one example of <a href="http://antifraudadvice.blogspot.co.uk/2012/06/wegolook-comes-to-europe-fraud.html" target="_blank">a high powered car dealer who defrauded friends</a>. A client who spent £225,000 on two cars could not be bothered to do a £5 text message to PPI check them, which would have revealed in minutes that the cars had outstanding finance on them and therefore could not be sold to him.  
 
 
 
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People, even very successful people can be susceptible to fraud. As we see in the latest Ponzi fraud <a href="http://www.bbc.co.uk/news/uk-england-london-21927450" target="_blank">where Levene, who was not in court, has admitted defrauding a series of business people including Sir Brian Souter and his sister Ann Gloag, the founders of the Stagecoach bus and rail group, and Richard Caring, owner of The Ivy and Le Caprice restaurants in London's West End</a>. 
 
Even the richest with the best legal protection can be taken in by fraudsters.

So please don’t think that you are in some way immune, remember the fraudster’s whole job is to be believable, and often they are good at it.  
 
That’s why the clichéd advice of “If it sounds too good to be true then it probably is” is such poor advice, the worst fraudsters will look like your best customers, not someone trying to sell you the Eiffel tower (and no, they are not looking for your property expertise to rent out the first floor due to the Euro financial crisis!).

So fraud is out there, before you enter a transaction, spend five minutes looking at what preventative measures you can do before you get in front of anyone, and then secondly and most importantly, do all the checks, no matter how ideal or fantastic the potential tenant looks like or how much of a rush they are in. Fraudsters know the checks won’t work, so they will use time pressure and distraction techniques to ensure you don’t do the checks.

On the other side of the coin, fraud is big problem for tenants also. <a href="http://www.homeoffice.gov.uk/publications/agencies-public-bodies/nfa/annual-fraud-indicator/annual-fraud-indicator-2012?view=Binary]Annual%20Report">The National Fraud Authority<javascript:void a=""> (PDF) estimates and a total of around £488 million!</javascript:void></a> 
 
In October 2010, the housing and homelessness charity Shelter carried out an online survey looking at the number of people who have been a victim of a scam involving a private tenancy or landlord. The YouGov research estimated that 946,000 people have been the victim of rental scams in the last three years, equating to around 315,000 victims per annum. 
 
The NFA has calculated an annual fraud loss estimate using the prevalence rate identified in the Shelter survey multiplied by an average fraud loss of £1550 per victim identified via Action Fraud in relation to rental fraud. 
 
 
 
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 Again these are probably devastating losses for these people. Landlords should keep this in mind and do what they can to reassure tenants that they are genuine, don’t be offended if they are asked to prove their identity and property ownership and also report any bad activity that they are aware of.

No checks are 100% and themselves can be fraudulently produced. If you have any niggling feeling then one of the best things to do is get a second pair of eyes on the deal to review it. Finally always be prepared to walk away from any deal you are not happy with.

Property Tribes asked me to post my thoughts on Fraud in Private Property Sector. There are a number of things that are different about ...

Fraud Focus - Germany - Even "Idiot" tests are faked!

Unknown 0 Payments and Fraud 8:00:00 AM

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqr5m9uDPhGh4BavEPApWEGpL378FoRIKaV36_qBcUdgC5kqor2yRM__6jACC2Qz0rvBaYW8Q0dt40CHV0AGMZQEedxg5LzjiXLf7EiZ-TBiJfuCp_B8oZQsQP1XCTeU_v1B89XxJ4R84/s1600/george+st+small.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="245" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqr5m9uDPhGh4BavEPApWEGpL378FoRIKaV36_qBcUdgC5kqor2yRM__6jACC2Qz0rvBaYW8Q0dt40CHV0AGMZQEedxg5LzjiXLf7EiZ-TBiJfuCp_B8oZQsQP1XCTeU_v1B89XxJ4R84/s320/george+st+small.jpg" width="320" /></a> Faked Idiot TestsAs with other parts of the worlds, certification by the state for various reasons has been outsourced to the private sector which brings the risk of fraud. The maths are simple, if the person taking the test, pays more than the government for administrating the tests, then temptation is there. In this case <a href="http://www.blogger.com/goog_456799726">"Idiot" (</a><a href="http://www.thelocal.de/society/20120224-40949.html" target="_blank">Medical Psychological Assessment) certificates</a> to people who needed to be assessed after losing a licence due to drug or alcohol use. Things must be bad if you need to buy the results of an idiot test! 
 Phishing victims' losses are own fault - court<a href="http://www.thelocal.de/money/20120425-42161.html" target="_blank">A phishing victim</a> who gave 5,000 euro from his Sparda Bank account to a Greek account claimed the transaction was not executed by himself. However a top German court has ruled that the Bank was not liable as he ignored warnings on redemption fraud. This victim was not unusual as in 2010 the Federal Criminal Police Office of Germany received 5,300 reports of loses to phishing, a rise of 82% on the previous year. 
 
German Authorities to sue Lying Dutchman 
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One of the strangest stories of 2012, was that of Van Helsum who showed up at Berlin's town hall last September claiming he was a 17-year-old called Ray, and had been living in the forest for the past five years with his father. His fanciful story, that his father had died in the forest, leaving him instructions to walk north until he found civilization, bamboozled police, press, and state authorities for ten months. Now however the authorities want to recoup the costs as he lived at the taxpayers expense for ten months at a cost of 30,000 Euro though is not to be found, perhaps he has returned to the forest!</div>
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German Transportation Alliance estimates fare dodging at 3.5%</div>
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An alliance of <a href="http://www.thelocal.de/society/20120203-40509.html" target="_blank">German Transport</a> is asking for 120 Euro fines for repeat fare-dodgers as it estimates 250m Euro fares lost and 100m Euro required for prevention. They note that dodgers are working in teams using social media to share knowledge about inspectors movements.</div>

Fraud Focus - Germany - Even "Idiot" tests are faked!

Faked Idiot Tests As with other parts of the worlds, certification by the state for various reasons has been outsourced to the private secto...

New life for old Petrol Station - New Branding versus Corporate Branding

Unknown 0 Payments and Fraud 7:00:00 AM

<h4>
This is a new use for an old BP petrol station near Camden, London UK.</h4>
 
I won't post a picture of a BP station, because you probably know what this looks like, but interesting to compare this to new marketing from <a href="http://www.bravenewventures.org/" target="_blank">BraveNewVentures</a> and how they transformed an old style petrol station with large corporate branding to new use. From what I can see they run immersion experiences, where you buy "mission tickets" are are going to be evacuated or other adventure. 
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<a href="http://d3j5vwomefv46c.cloudfront.net/photos/large/599256454.jpg?key=640480&Expires=1340101545&Key-Pair-Id=APKAIYVGSUJFNRFZBBTA&Signature=EfwGemrKsUHEiCoGujZZH6YsAE2du5PRznDbxkl~SmRyZQdtRKaxJcC3erGhu21dKAKo3AUeGE6hS8-z~6OIKOaziJa5KOy6vh59CH7PpJNp6iQG4115tvmSR~We4gxLxOVx8yVOdBxIfXr82bve8rOP6bISdlkb9WceOxKbzAU_" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://d3j5vwomefv46c.cloudfront.net/photos/large/599256454.jpg?key=640480&Expires=1340101545&Key-Pair-Id=APKAIYVGSUJFNRFZBBTA&Signature=EfwGemrKsUHEiCoGujZZH6YsAE2du5PRznDbxkl~SmRyZQdtRKaxJcC3erGhu21dKAKo3AUeGE6hS8-z~6OIKOaziJa5KOy6vh59CH7PpJNp6iQG4115tvmSR~We4gxLxOVx8yVOdBxIfXr82bve8rOP6bISdlkb9WceOxKbzAU_" width="320" /></a></div>
TwitPic @siobhangee 
 
Instead of the standard green of BP, they just use grey with a hashtag and a name, assuming their audience will know what that means. They do include a white on green BNV square logo on top of the roof. 
 
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgf3mg83WgQ_j64HgfiIgV7dlg1dxVQGsAlKArV3FRpATl7CxA0LCnq5ux46J_jsmZ56IHtNwnpO7OJZ9uInQoveKBbEvTWFcGoRx2LmfVhQ7_XRSQW484-sYS30Be_uNjfgJaDPsCz2g/s1600/BNV1.jpg" imageanchor="1" style="background-color: white; clear: left; display: inline !important; margin-bottom: 1em; margin-right: 1em; text-align: center;"><img border="0" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgf3mg83WgQ_j64HgfiIgV7dlg1dxVQGsAlKArV3FRpATl7CxA0LCnq5ux46J_jsmZ56IHtNwnpO7OJZ9uInQoveKBbEvTWFcGoRx2LmfVhQ7_XRSQW484-sYS30Be_uNjfgJaDPsCz2g/s400/BNV1.jpg" width="400" /></a> 
 
On the glass this is not replicated but there is a circle logo with BNV which also appears in other places. Where the pumps were are now some kiosks. 
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbwN5F7lfjTA-_LAJesmKLzJzTTSr250cD0p1R265fR7K9WlNYGV7b7cMOB1d9vdxgi6FK3Cn_6yPsZlrmdkl0I9SVhh2546pq7v8256fra4xHMObt9seQ5wdyoLPPuxY-Qjs-XxvX3M4/s1600/BNV2.jpg" imageanchor="1" style="background-color: white; clear: left; display: inline !important; margin-bottom: 1em; margin-right: 1em; text-align: center;"><img border="0" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbwN5F7lfjTA-_LAJesmKLzJzTTSr250cD0p1R265fR7K9WlNYGV7b7cMOB1d9vdxgi6FK3Cn_6yPsZlrmdkl0I9SVhh2546pq7v8256fra4xHMObt9seQ5wdyoLPPuxY-Qjs-XxvX3M4/s400/BNV2.jpg" width="400" /></a> 
Overall its different, but I am not sure it convinces me of the of impending Apocalypse! 
 
 
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New life for old Petrol Station - New Branding versus Corporate Branding

This is a new use for an old BP petrol station near Camden, London UK. I won't post a picture of a BP station, because you probably k...

When checks become routine, it can spell danger!

Unknown 0 Payments and Fraud 8:30:00 AM

When checks become routine, it can spell danger!</h2>
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<h4>

Fraud losses to UK Business can be 1.5% to 3% of turnover!</h4>
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Checking some of my child's homework at the weekend, despite having had many reassurances of "not having any homework", I discovered that some assignments had been missed on one of the online websites where their teacher can set assignments. They had not been notified by the teacher of each assignment, but had been previously told to check there regularly which they forgot to. Ignorance is bliss, well at least up until your Father finds your missing homework!</div>
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This can apply to checks and balances in business also, if you ask the same questions every time and never follow up, then you will probably get the same answer every-time, at least until you get a nasty surprise.</div>
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So the next time someone who handles any of your finances tells you its "fine" remember it may mean any of the following. </div>
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<div>
<ul>
<li>Everything is actually fine!</li>
<li>There is a small problem but I think I can handle it without your help and before you notice!</li>
<li>There is a problem but I haven't noticed!</li>
<li>There is a problem I hope you don't notice before my "holiday" next week! p.s I don't have a return ticket!</li>
</ul>
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Perhaps its time to change your questions and ask to see what is really going on? Its a good idea to change the questions and to ask for evidence also.</div>
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"Can we go over what happened last week?" is a much better question than "How are things going?"</div>
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<div>
Whatever your questions, always vary your routine. In case you think that looking for fraud in your organisation is not important the National Fraud Authority <a href="http://www.homeoffice.gov.uk/publications/agencies-public-bodies/nfa/annual-fraud-indicator/annual-fraud-indicator-2012?view=Binary" style="font-family: Verdana, sans-serif;">annual report (PDF)</a> surveys and combines data sources to reveal extent of fraud in the UK in the public and private sector. 
 
To approximate the scale of fraud loss that could be suffered by the UK private sector, the conservative estimate of 1.4 per cent has been applied to the turnover of the UK private sector by industry. .... 
Respondents providing an estimate (91 respondents10) reported that on average fraud losses against their organisation could be 3 per cent of turnover. However, amongst those who were ‘sure’ or ‘very sure’ (37 respondents), this estimate reduced to 1.4 per cent of turnover. 
Page 16 
 
Any other problem that is going to take 1.5% to 3% of turnover out of a company should be subject to great interest from management and who should provide the appropriate reaction. Fraud is a very real problem for all businesses, so ask the right questions and don't ask the same questions all the time!</div>

When checks become routine, it can spell danger!

When checks become routine, it can spell danger! Fraud losses to UK Business can be 1.5% to 3% of turnover! Checking ...

National Fraud Initiative paying dividends on reduced fraud and errors

Unknown 0 Payments and Fraud 8:00:00 AM

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The National Fraud Initiative seems to be paying dividends even though Whitehall departments are  not taking part. In Northern Ireland they found <a href="http://www.bbc.co.uk/news/uk-northern-ireland-12465555">5000 disabled parking badges were registered to dead people</a>!  
 
In Wales the NFI saved <a href="http://m.guardian.co.uk/politics/2012/may/16/government-departments-fraud-busting-scheme?cat=politics&type=article">£6m of public sector funds</a> by comparing data across many departments to reduce fraud.

Despite saving over £1bn over sixteen years a number of public sector organizations do not take part in NFI but
are now being encouraged to do so.  
 
In similar area, <a href="http://www.telegraph.co.uk/news/uknews/crime/9270762/Arrests-over-alleged-1.6-million-fraud-at-taxpayer-funded-football-scheme.html">three people have been arrested for a £1.6m fraud against a government back football </a>scheme where they allegedly submitted fake invoices and documentation to support the fraud including progress reviews and certificates.

National Fraud Initiative paying dividends on reduced fraud and errors

The National Fraud Initiative seems to be paying dividends even though Whitehall departments are not taking part. In Northern Ireland th...

The A-Z of Fraud including Tabnapping and Mandate Fraud

Unknown 0 Payments and Fraud 8:00:00 AM

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Action Fraud have put together an <a href="http://www.actionfraud.police.uk/a-z_of_fraud">A-Z of fraud</a>, which makes interesting reading. 
 
A couple I had not heard of included: 
 
<a href="http://www.actionfraud.police.uk/fraud-az-tabnapping">Tabnapping</a> which uses new tab functionality in browsers to present fake bank details. 
 
<a href="http://www.actionfraud.police.uk/fraud-az-office-supply-scams">Office Supply Scams</a> where expensive goods are pushed onto businesses on the basis that someone else in the business agreed to buy them. 
 
And <a href="http://www.actionfraud.police.uk/mandate-fraud">Mandate Fraud</a> where the funds leave the victim, person or business, via a direct debit mandate. The business or person may be contacted by a clone of a supplier with a change of bank account details asking to change bank payment details and then pocketing any further payments. 
 
Finally there is <a href="http://www.actionfraud.police.uk/protect-yourself/fraud-recovery-fraud">Fraud Recovery Fraud</a> where fraud victims are taken for a second time, where a fraudulent supplier of services will offer help to a fraud victim, offering the possibility of recovering funds, but then charge the victim various fees for services that will not delivery anything. It seems particularly cruel to target victims, but if you are fraudster then they are an easy target.

The A-Z of Fraud including Tabnapping and Mandate Fraud

Action Fraud have put together an A-Z of fraud , which makes interesting reading. A couple I had not heard of included: Tabnapping ...

Gold, Silver, Art and Antiques nice target for customer-not-present fraud

Unknown 0 Payments and Fraud 8:00:00 AM

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<h4>
Gold, Silver and small Antiques are making a profitable target for card-not-present fraudsters.</h4>
<a href="http://www.antiquestradegazette.com/news/8227.aspx" style="line-height: 16px;">CREDIT card fraud affecting auction houses and dealers is on the increase all over the country, say the police.</a> 
 
These frauds target gold, silver and small antiques. These are ideal targets that can be easily traded and turned into cash. This fraud breaks down into a few elements, a stolen card of course and also a 'rented' address where the fraudster will often stand outside a known empty property.  
 
This <a href="http://www.blogger.com/goog_1863650805">dealer '</a><a href="http://www.antiquestradegazette.com/news/8227.aspx">sold' a c.1875 four-barrelled Derringer pistol for £1100</a> only for to receive a dreaded chargeback from his card terminal. An expensive mistake I am sure for a small dealer. Although he could have had more fraud protection, he also should have considered other payment means like a bank transfer for such a large amount and waiting a couple of days to clear. These should be clearly laid out in T's&C's afterall in antiques, what is the rush?

Gold, Silver, Art and Antiques nice target for customer-not-present fraud

Gold, Silver and small Antiques are making a profitable target for card-not-present fraudsters. CREDIT card fraud affecting auction hous...

Gambling and Lottery Fraud and Fraudsters

Unknown 0 Payments and Fraud 8:00:00 AM

Jamican based scammers increase <a href="http://www.moneymarketing.co.uk/mortgages/mortgage-broker-jailed-for-fraud-after-met-alerted-to-lavish-lifestyle/1047578.article"> lottery fraud in USA</a> spreads despite <a href="http://www.cbsnews.com/8301-501715_162-57415245/jamaican-lottery-scams-spread-despite-us-crackdown/">crackdown</a>. 
Complaints from American citizens about Jamaican lottery fraud soared from 1,867 in 2007 to about 30,000 last year, and most incidents go unreported out of fear or embarrassment, according to the U.S. Federal Trade Commission. 
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I like this summary, the older generation put trust in "authenticated" letters, seals and documents. Fraudsters also know the words play on the emotions of lonely people. That is the scammers job, to find what you are looking for and to pretend to deliver it. 
 
This elderly lady would wire money to people up to three times a day. Again its so easy in hindsight and to say that I would never be caught, but fraudsters are waiting for the right opportunity. 
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When you win for some people its not enough! 
 
Michigan lottery <a href="http://www.statesman.com/news/nation/michigan-lottery-winner-charged-with-welfare-fraud-2310040.html?cxtype=rss_ece_frontpage">winner food stamp frau</a>d and winner of $1000 a week for life in benefit claims fraud. 
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A lottery winner who bought and gave away a second winning ticket and then t<a href="http://youtu.be/5M6f_xEflN8" style="font-family: Verdana, sans-serif; text-align: left;">he curse of winning</a>! A guy who won millions but regrets it. There is also this from the UK on girl who won <a href="http://www.dailymail.co.uk/news/article-2137599/Callie-Rogers-expecting-twins--2m-lottery-winner-shows-baby-bump-tattoo.html">£2m at 16 years old</a> and has £40k at 25 years old.</div>
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I guess part of this is due to the American system that does not allow winners anonymity. If I win, you wont see me for dust and wont see me on TV collecting my check!</div>

Gambling and Lottery Fraud and Fraudsters

Jamican based scammers increase lottery fraud in USA spreads despite crackdown . Complaints from American citizens about Jamaican lotte...

Energy Fraud - Four Ways Electricity Supply is Stolen

Unknown 0 Payments and Fraud 10:54:00 AM

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With energy prices rising then fraud and theft of electricity supply will expand. Here are some of the ways that electricity fraud happens throughout the world. 
 
 
<h4>
Hardware Hack with Magnets</h4>
In the USA,  electricity  <a href="http://krebsonsecurity.com/2012/04/fbi-smart-meter-hacks-likely-to-spread/">Smart Meters</a> have been introduced to allow electricity companies to remotely read them and to allow better energy management. Some hardware and software based hacks have been developed, the hardware involves magnets strategically placed to alter readings like for example when air conditioning would run overnight.  
 
There is even a handy video on YouTube on how magnets and distilled water can slow down the meter no matter how much electricity is being used. Although it involves mixing water and electricity which would make me nervous! It shows evidence of reducing bills by 50%! 
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<h4>
 </h4>
<h4>
Software Hack on Smart Meters</h4>
The other hacks involve using a security infrared connection designed for engineer diagnosis to allow a computer to connect to the smart meter and change the power recording settings.  Security of access is a challenge when rolling out millions of devices of course but I wonder how much time was spent on security during the hardware and software design phase of these solutions? Both of these hacks were preventable but of course are also probably traceable to the homeowner. 
 
 
<h4>
Hacked or Cloned Pre-Paid Tokens</h4>
In the UK, <a href="http://www.energy-uk.org.uk/publication/finish/5/278.html">this report</a> (pdf) highlights the problem of fraudsters convincing customers of pre-pay electricity meters to pay. The fraudster will appear to add £50 worth of electricity for the price of £25 using a cloned pre-pay meter key. However the electricity company may detect these, leaving the customer paying £25 for nothing. The <a href="http://www.utilityweek.co.uk/news/news_story.asp?id=196768&title=Electricity+prepayment+meter+fraud+update">latest figures</a> say this happened 88k times costing the industry £2.2m in lost revenues. This is an anti-scam message for consumers. 
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<h4>
Wiring bypass of Meters</h4>
Of course the final way to steal electricity involves actually wiring to bypass the meter altogether. This is probably the most dangerous and involves risk of  electrocution and fire. A summary report here. 
 
 
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As electricity gets more expensive, and when it may be powering our cars in the future these frauds are not likely to go away anytime soon.

Energy Fraud - Four Ways Electricity Supply is Stolen

With energy prices rising then fraud and theft of electricity supply will expand. Here are some of the ways that electricity fraud hap...

When fraud is just the fraud departments problem!

Unknown 0 Payments and Fraud 9:44:00 AM

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Watching the episode on <a href="http://www.bbc.co.uk/iplayer/episode/b01cyt4l/The_Tube_Episode_2/">The Tube</a> the other night (still available on BBC Iplayer UK only though), which concentrated on the profit protection team from London Underground network, a number of thoughts struck me. 
 
The profit protection team targeted the worst offenders which makes sense to a degree but would targeting lots of small occasional offenders yielded more revenue or fines? 
 
It seemed like the reaction of staff to fraud was to call the profit protection team rather than owning the problem themselves. This is the challenge of having a specific fraud team others may now feel that this is not their problem. Like no one is going to start marketing new fares on their own, so too it seemed fraud was a problem for a specific team which seemed like a miss. 
 
I have been using the underground for two years and have never been checked and the attitude of those caught was a bit, well its like OK I have been caught this time, but not the previous 30 times so at £4.40 a journey then I am still ahead, none of those caught seemed like they were going to change their behaviour in the future which is the ultimate aim of profit protection surely, in that sense their strategy seemed ineffective. 
 
London Underground loses £20m a year through fraud and fare evasion, the revenue department were there to define strategy to reduce it. Yet the revenue team didn't seem to have scope to be able to introduce new technology to prevent future fraud which seemed like a miss. 
 
The other issues they dealt with were, counterfeit tickets and 
persistent offenders. Its worth a watch to see some of the abuse the profit protection field members suffered. A big fraud problem to deal with, but perhaps some new thinking in strategy is required?

When fraud is just the fraud departments problem!

Watching the episode on The Tube the other night (still available on BBC Iplayer UK only though), which concentrated on the profit protec...

The Ultimate Anti-Fraud and Better Buying communications app.

Unknown 2 Payments and Fraud 8:00:00 AM

So as App's are everywhere from your phone to your TV and soon to be your fridge, I wondered what would be the requirements list for an anti-fraud and better buying application would be to run on your futuristic communications device to use either at home or mobile. The objective of the app would be to aid, inform and warn the user against fraud or bad buying decisions. 
 
So my assumption is that there are no technology limitations, what are the requirements for the ultimate Anti-Fraud and Better Buying Application? 
 
Technical Components 
<ul>
<li>Voice recognition and comparison to known fraudsters and spammers whilst in the call</li>
<li>Voice emotion detection with on screen prompts like the caller is angry</li>
<li>Lie detection with on screen prompts</li>
<li>GPS/IP GEOLocation of the speaker are they where they say they are</li>
<li>Sweat detection from the earlobe of the caller for lie detection</li>
<li>Timezone recognition the caller is in</li>
<li>Business/person marked as spam or fraud by others</li>
<li>Review of information available on the company and caller during the call with information presented to the screen</li>
<li>Conferences in third party (family) for decision points</li>
<li>Smell - off-putting smell that users connect with would be output from the communication device for risky actions</li>
<li>Don't hold the device to your ear, so you can use the screen real estate</li>
<li>Ability for callers to send an in-call prompt onto the receivers screen to gain feedback during the call like options  "I'm Interested" "I'm Bored and hanging up in 5 seconds" "I'm bored but too polite to hang up"</li>
<li>App prompts the buyer for a review afterwards delivery to get feedback and share knowledge with other app users</li>
<li>Prompt on handing over Personal Identifiable Information at this point when you dont known them e.g say I have some kids, rather than breaking it down at this point with kids by date-of-birth, by call type for example DOB or age may be required quite early in a travel booking.</li>
<li>Prompt on </li>
<li>As 3rd parties join the call then they could silently </li>
<li>Validation of information sources like Search Engine ranking, cert on website feedback from consumers in forums, prompting to challenge seller on negative feedback displayed to receiver of the call</li>
</ul>
 
Users would say - like having your Dad on the call! 
 
How it works: Better Buying 
 
User needs to look at the screen whilst listening to or viewing the call: 
 
As the conversation proceeds the application put up prompts, questions, suggestions on the screen for the receiver to read, acknowledge or choose.  
 
The system would prompt the caller for information it cannot generate itself, like 
 
Question: Is this call about PRODUCT SERVICE or INVESTMENT? 
 
User touches the relevant button. 
 
Validations occur as caller details are presented for the receiver to validate: 
 
Information: The caller is in London, is not on a known fraudsters voice recognition list and has not been on a voice recognition spam list. 
 
As the user responds to questions from the caller then warnings appear like 
 
WARNING: Confirm if married with children but not names date of birth or ages at this stage 
 
Question: Are you interested in this product or service? 
 
If Yes will look for information to negogtiate with. 
 
The call continues: 
 
Information: Things to mention their user rating is 90%+, forums mention mention many delivery problems and this provider is running a better promotion for existing users than they are offering you. 
 
The caller may put some prompts onto the screen for the receiver to touch  
 
Request for Feedback to Caller"I'm Interested" "I'm bored but too polite to hang up" "I need you to hurry up" which would be chosen by the receiver and fed back to the caller. 
 
The call continues:  
 
Information: Ensure you ask about cancellation policy, privacy policy and the total cost. 
 
The call continues as it nears a decision point a predefined third-party is asked to join the call.  
The third-party can either see a text summary of the call so far or play a recording of the call so far. 
The caller and receiver are notified about the third party as they join the call 
 
 
A Decision point summary is displayed to the receiver and the third-party on the screen: 
 
Fraud Summary 
They are who they say they are - 97% 
They can supply the product service or investment they are selling - 95% 
Maximum Potential loss £134.56  (includes purchase cost, time costs, reputation liability, identity theft recovery) 
Risk of being fraudulent 5% 
Caller Truth Probability 93% 
 
Buying Summary 
 
Financial Commitment 
This purchase represents 10% of your monthly disposable income 
or 
This investment represents 50% of your current available investment funds 
 
Budget  
If you proceed with this purchase you should consider cancelling order placed yesterday for similar value for a different item to keep to your entertainment budget for this month. 
 
Buyers Remorse 
 
Of similar decions by other users, 5% of other users who made a decsion to proceed regeretted it. 
or  
Of similar decions by other users, 10% of users who made a decsion not to proceed regretted it.  
 
Question: Are you going to place an order? 
 
If Yes then after the call and product/service is delivered the user is prompted to record any service issues etc. to feed into others feedback via the app. 
 
A recording of the call is available so that any promises made during the call can easily be replayed to the supplier if the service promise was not delivered. 
 
 
 
How it works: Fraud 
 
User needs to look at the screen whilst listening to or viewing the call: 
 
As the conversation proceeds the application prompts the user for information it cannot generate itself, like 
 
Question: Is this call about PRODUCT SERVICE or INVESTMENT?
 
 
 
Validations occur as caller details are presented for the receiver to validate: 
 
Warning: The caller is in not in location specified by voice and is on a known fraudsters voice recognition list  
 
As the user responds to questions from the caller then warnings appear like 
 
WARNING: Confirm if married with children but not names date of birth or ages at this stage 
 
Question Are you interested in this product or service? 
 
If Yes will look for information to negogtiate with 
 
The call continues: 
 
Information: Things to mention their are many reported problems with cancellation and customer service. 
 
 
The call continues as it nears a decision point a predefined third-party is asked to join the call.  
The third-party can either see a text summary of the call so far or play a recording of the call so far. 
The caller and receiver are notified about the third party as they join the call 
 
 
Decision point summary: 
 
Fraud Summary 
They are who they say they are - 97% 
They can supply the product service or investment they are selling - 15% 
Maximum Potential loss £534.56  (includes time costs, liability, identity theft recovery) 
Risk of being fraudulent 79% 
Caller Truth Probability 13% 
 
Buying Summary 
 
Financial Commitment 
This purchase represents 10% of your monthly disposable income 
or 
This investment represents 50% of your current available investment funds 
 
Budget 
If you proceed with this purchase you should consider cancelling order placed yesterday for similar value 
 
Buyers Remorse 
Similar decions by other users 90% of other users who made a decsion to proceed regeretted it  
or  
1% of users who made a decsion not to proceed regretted it (not as many as people as sales people will say!) 
 
 
The summary is presented to the user at the decision point, a bad smell would eminate from the phone to re-inforce the decsion. 
 
In addition the Proceed Yes/No prompt would show the No button as 10 times the size of the Yes button. 
 
After the call 
 
After the call and product/service is delivered the user is prompted to record any service issues etc. to feed into others feedback 
 
A recording of the call is available so that any promises made during the call can easily be replayed to the supplier if the service promise was not delivered. 
 
Percentages would probably never be 100% or 0% because even if the company exists there is always a risk that a genunie company is being spoofed and no system is fraudproof 
 
 
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The Ultimate Anti-Fraud and Better Buying communications app.

So as App's are everywhere from your phone to your TV and soon to be your fridge, I wondered what would be the requirements list for an...

Voucher Fraud against Retailers

Unknown 0 Payments and Fraud 8:00:00 AM

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Voucher Fraud against Retailers 
 
A good summary from <a href="http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8791045/Struggling-consumers-spark-discount-voucher-fraud-boom.html">the Telegraph</a> of challenges retailers face in these hard times on fraud on vouchers and coupons, ones that were previously not a big problem. 
 
 
 
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In July, a Cambridgeshire couple, Nigel and Penny Ward, pleaded guilty to reusing their Tesco Clubcard vouchers dozens of times to obtain almost £1100 worth of free groceries.</div>
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In what believed to be the first prosecution for voucher fraud, the couple, who claimed they had fallen on hard times due to illness, were sentenced to a 12-month community order and ordered to pay £250 each in compensation to Tesco.</div>
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Sylvia Rook, from Trading Standards Institute, a consumer group, said: "If the consumer has deliberately ignored the terms and conditions or misused a voucher in order to obtain goods, or cause loss to the retailer, then the consumer could potentially be defrauding the retailer, and could be prosecuted for fraud."</div>
 
 
Of course retailers need to take precautions within their systems and processes. 
 
Online validation - making coupons and vouchers one-use, through on-line validation is one of the safest ways to implement them. Systems are similar to credit card messages where the coupon is validated against a central system in seconds. 
 
Self Checkout - self checkout is often a weak spot for coupons and vouchers. Retailers need to ensure that if coupons/vouchers are accepted that either the self-checkout validates them or the attendant does. 
 
Staff Collusion - Coupons/vouchers offer opportunities for staff collusion. This may be from helpful staff pointing out to customers vouchers/coupons that they have missed, to more damaging actions like choosing not to validate the voucher/coupon relates to an item that has been sold. Retailers may not lose out to this, but if a manufacturer is supporting the discount they want their product to be sold.

Voucher Fraud against Retailers

Voucher Fraud against Retailers A good summary from the Telegraph of challenges retailers face in these hard times on fraud on vouchers...

How the internet changed Fraud in Dating - Threatmetrix

Unknown 0 Payments and Fraud 8:00:00 AM

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How the internet changed Fraud in Dating 
 
Love and money have always mixed and grifters used love as bait but what is different in the internet age is that scammers on dating sites don't actually need to come face to face with their victims.  
 
<a href="http://www.moneywise.co.uk/news/2011-09-29/200000-people-victims-online-dating-scams">This survey</a> indicates the UK has more than 200k victims of fraud through dating sites, with victims losing £5k to £200k per incident.  
 
Consumers using data sites, may well think of personal safety when attending dates but should also think about what the site is doing to valdiate that the people on the site are who they say the are and are where they say they are. 
 
Many anti fraud technologies are available for dating sites like <a href="http://www.threatmetrix.com/fraudsandends/tag/dating-fraud-2/">ThreatMetrix </a>using IP and other checks which keeps scammers off sites. So if you need to use internet dating sites, check which protection the site will offer you as a consumer. Sadly they quote an example of a Widow losing $500k to a fake "General".

How the internet changed Fraud in Dating - Threatmetrix

How the internet changed Fraud in Dating Love and money have always mixed and grifters used love as bait but what is different in the in...

Do warnings really work in fraud prevention?

Unknown 0 Payments and Fraud 8:00:00 AM

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Do warnings really work in fraud prevention? 
 
Its a natural reaction for victims and media in reaction to a fraud being committed, is to spread the warning message to prevent other victims. I often even do it myself, but the truth is that warnings don't really work that well for a number of reasons, after-all if they did then fraud would have been stopped long ago! 
 
Firstly the chances are that any particular warning will be completely irrelevant to you, you won't happen to meet they guy selling shares in the pub or doing deals  on cheap air purifiers or use the ATM with a skimmer. 
 
Secondly too many warnings, there are warnings about every aspect of life thrust upon us constantly, we simply cannot absorb them all. 
 
Thirdly even if the warning is relevant to you then it may well difficult to recall that particular warning in the required circumstance and warning tend to be general and not specific. Even if they were specific about say certain phrases, then fraudsters would simply change the phrases. 
 
Rather than warnings, perhaps a better approach is to build review/fraud checks into processes. I think the most important rule would be to involve someone else in decisions, but, it must not be to ask their opinion on something, so not "Should I do something" questions, but more specific questions like "Do you think these people are who they say they are" or "Do you think that these people can deliver these products?".

Do warnings really work in fraud prevention?

Do warnings really work in fraud prevention? Its a natural reaction for victims and media in reaction to a fraud being committed, is to ...

When Fraud Costs a whole business to fail with 35 jobs lost

Unknown 0 Payments and Fraud 8:28:00 AM

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When Fraud Costs a whole business to fail with 35 jobs lost 
 
A <a href="http://www.dailymail.co.uk/news/article-2093040/Legal-secretary-caused-collapse-solicitor-s-firm-400-000-fraud-jailed-years.html?ito=feeds-newsxml">sad story here</a> for a small business where a fraud of £400k cost an entire business to fail with the loss of 35 jobs. 
 
 
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'It started with her taking £2,000 to pay bills. She thought nobody would notice and she would return the money before anyone did.'</div>
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But, he said, when she realised how easy it was, it became a 'spiral effect'.</div>
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He said: 'Smaller amounts turned into much larger amounts.</div>
 Read more: <a href="http://www.dailymail.co.uk/news/article-2093040/Legal-secretary-caused-collapse-solicitor-s-firm-400-000-fraud-jailed-years.html#ixzz1kvMXm5nU" style="color: #003399; cursor: pointer; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; min-height: 1px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: none;">http://www.dailymail.co.uk/news/article-2093040/Legal-secretary-caused-collapse-solicitor-s-firm-400-000-fraud-jailed-years.html#ixzz1kvMXm5nU</a>
 
 
Notice that for the first fraud, her intention was to return the money. Now is that something that her lawyer is saying to plead her case? It may well be true, but when she did not return the money and she found no immediate consequence of taking it, then there was only one path that this would take, she repeated the pattern for larger and larger amounts until she was caught. As this fraud was against the solicitors firms clients trust accounts, then it suffered the ultimate loss of trust and therefore had to close. £250k was recovered.

When Fraud Costs a whole business to fail with 35 jobs lost

When Fraud Costs a whole business to fail with 35 jobs lost A sad story here for a small business where a fraud of £400k cost an entire...

Business Paying for Police help with Fraud Case

Unknown 0 Payments and Fraud 9:30:00 AM

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UK Business Paying for Police help with Fraud Case 
 
<a href="http://www.telegraph.co.uk/news/uknews/law-and-order/9046679/Virgin-Media-secretly-pays-police-for-fraud-investigation.html">The Telegraph</a> reports that Virgin Media paid for Met police services to bring a case against a fraudster that imported media boxes that allowed users to access Virgin Media TV services for free.  
 
Virgin Media agreed to pay officers' overtime at a total cost of £5,060 following a series of raids that exposed an international scam that was costing the company £144 million a year.
 
 
Companies do pay for police services for example for events but covering costs for a fraud investigation is unusual. It seems like a balance for businesses saying we already pay for these services against cuts to police budgets and getting priority on an investigation and limiting damage from ongoing fraud. The maths seem simple £5k overtime to prevent a £144m fraud, but it brings a lot of questions, like is access to justice based around ability to pay? 
 
Personally I feel, like with the payments to police offices from journalists current controversy, any mixture of police and payments will always end up badly. If a UK tax paying company has a serious fraud problem then it shouldn't have to fund police work to make a case for prosecution.  
 
Having said that I don't see much problem with Virgin Media's actions who acted within the law to prevent a very big fraud. There are many ex police officers working for profit protection departments so there is already a cross-over there.

Business Paying for Police help with Fraud Case

UK Business Paying for Police help with Fraud Case The Telegraph reports that Virgin Media paid for Met police services to bring a case...

You wont get it back! Conman ordered to repay £1 for £40k fraud

Unknown 0 Payments and Fraud 8:00:00 AM

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Sadly, victims of fraud, be they individuals, charities or businesses, rarely see any money recovered once the fraudster has been prosecuted. Prevention is always much better than a cure. 
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A sad example here where a conman who stole over £40k was ordered to payback just £1 as he did not have assets to recover.</div>
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Unfortunately <a href="http://www.theboltonnews.co.uk/news/districtnews/districtatog/9480615.Conman_to_repay_just___1_from___40k_fraud/">this person was trusted</a>, despite having appeared on <a href="http://www.bbc.co.uk/watchdog/">watchdog</a> the UK consumer affairs programme, for previous dealings (not as a presenter!). </div>
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All this was not enough for his neighbours not to trust him.</div>
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With his neighbours unaware of his past, he volunteered to act as treasurer for The Parklands management company and would often be given blank cheques by the directors to pay for what they thought were legitimate expenses.</div>
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No matter what the organisation, cheques are there to be co-signed and should never be given out blank, basic checks and balances must always be carried out. 
 
Sadly<a href="http://ashington.journallive.co.uk/2009/07/envious-ashington-mum-stole-fr.html"> this case</a> shows even families have trust issues, where a jealous sister, stoked £8k from her more successful sibling. As often the case with cheques, its not sophisticated fraud, simply an old cheque book that was left around was used. Also like many frauds, it would not have happened if the opportunity had not presented itself. Again although ordered to repay, the victim is unlikely to recover any funds.</div>
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You wont get it back! Conman ordered to repay £1 for £40k fraud

Sadly, victims of fraud, be they individuals, charities or businesses, rarely see any money recovered once the fraudster has been pros...

You have a celebrity endorsement, get out of here!

Unknown 0 Payments and Fraud 7:00:00 AM

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You have a celebrity endorsement, get out of here! 
 
A fraudster pending sentencing c<a href="http://www.lep.co.uk/news/local/man_jailed_for_role_in_17_5m_banking_fraud_1_4122971">ompleted a £17.5m banking fraud.</a> Where a fraudulent property development in Turkey as being financed. Part of the story used was to say the money was for a property development of which some celebrity footballers had already bought villas in the development and would help promote it.  
 
The problem with celebrity endorsement is that they are very hard to verify as celebrities are hard to get hold of. I would discount any endorsement unless there is a photo/video/other evidence available from the celebrity with the associated product or service.

You have a celebrity endorsement, get out of here!

You have a celebrity endorsement, get out of here! A fraudster pending sentencing c ompleted a £17.5m banking fraud. Where a fraudulent...