November 1999 Topics
Authentication Mechanisms,
Check-cashing Ring, Joe Soap,
Postal Job Scam, and Skimming
 

Over 100,000 gullible people respond to postal job scams every month.
 

Fraud In Other Words: Professional Jargon and Uncensored Street Slang
By Larry C. Adams, CFE, CPA, CIA, CISA
 

Authentication Mechanisms
Authentication mechanisms validate the identity of users and networked computers. Mechanisms include passwords, access tokens, biometrics, cryptography, digital signatures, and location signatures. Without adequate authentication, access controls are useless, since cyber thieves can impersonate legitimate users and gain access to sensitive information.
“5 Steps to Foiling Info Thieves,” Information Security, April 1999, p. 29.
 

Check Cashing Ring
An elaborate check cashing scheme. The co-conspirators obtain actual payroll checks from legitimate local companies. The fraudsters use those checks to order new blank checks in the name of those businesses. They arrange for commercial printers to deliver the new blank checks to a nondescript post office box or commercial mail stop. The fraudsters issue a series of payroll checks to many aliases of the co-conspirators. The amounts of the checks range from $250 to $500, in odd amounts, so they appear to be payroll checks issued to individuals “working in low paid positions. They obtain identification cards to match the fictitious names of the payees on the checks. To cash the counterfeit checks, the fraudsters target supermarkets, discount stores, and check cashing establishments. After the fraudsters quickly cash a flood of checks all over a city, they move on to another metropolitan area and try the scheme again.
Business Wire, “Cambridge Man and New York Woman Plead Guilty to Participating in Check Cashing Ring,” AOL News, December 22, 1997.
 

Joe Soap
A foolish or gullible person. A mug.
John Ayto & John Simpson, The Oxford Dictionary of Modern Slang, Oxford University Press, Oxford, Great Britain, 1996, p. 115.
 

Postal Job Scam
Companies place deceptive newspaper and magazine ads stating that thousands of high-paying postal jobs are available. They offer study material for $50 to prepare customers for the postal exam. Postal investigators estimate that 100,000 to 250,000 responses to the ads are received each month by a dozen companies. Some companies promise refunds if the customer doesn’t land a job. The victims of the scam request refunds when they learn that no post office jobs are open in their area. The companies routinely deny any refunds because the customers opened the package of materials they sent. The customers are not aware that current federal job vacancies are listed for free on the Internet at www.usajobs.opm.gov. Additional vacancy listings are available from local postmasters. Also they are not aware that there is no fee for taking the postal exam. The customers do not realize the qualifying exam tests aptitude, not knowledge; so advance studying will not help. They are not aware that no company can guarantee getting a post office job.
Randolph E. Schmid, Associated Press, “Some Ads for Postal Jobs Are Fraud,”, AOL News, January 22, 1998.
 

Skimming
Skimming is the fraudulent copying of the data on a magnetic stripe by swiping a credit card or a debit card through a magnetic stripe reading device and then transferring the data to a blank card. The fraudster acquires a readily available magnetic stripe reader. Then he recruits an accomplice - an employee of a retail location, often a gas station, car wash, restaurant, hotel, or high end retail store. The stripe reader is put on the counter and connected to a portable computer hidden below the counter. When a card is presented for payment, the accomplice swipes the legitimate card through the fraudster’s card reader (to capture the stripe data) and then through the authorized card reader (to get approval for the charge). A hidden video camera is used to view the PIN (Personal Identification Number) keyed by the customer. A handheld skimming device is only 3 inches long. It can be clipped to a belt loop on a pair of pants like a pager. Waiters and waitresses in restaurants have been known to wear these devices and skim patrons’ cards when taking care of the bills. The employee is paid $20 - $50 per account skimmed. The skimmed data from hundreds of cards is faxed or e-mailed to individuals who are involved in manufacturing counterfeit cards, nearby or in other countries. Counterfeiting plants are very mobile and can operate out of an automobile. The data is easily transferred to usable target cards; even hotel keys with magnetic stripes have been used. Fraudulent usage has occurred in Ontario, Western Canada, United States, Japan, Europe, Mexico, and Italy. Thieves steal $150 million each year from ATMs. Cloned cards are fraudulently used within 2 to 14 days of being skimmed. Skimmed credit cards and PINs are tested at pay phones, gas stations, and cinemas to determine if they are valid. To deter skimming, some credit cards have a CID (Card Identification Number). The CID is a four digit non-embossed code number imprinted on the face of the original cards. The CID can be verified by calling the credit card issuers’ authorizing operators and fraud investigators.
“ATM Fraud,” 20/20, ABC Television News, June 25, 1999.
Photo: www.wnduextra.com/view_story.
php?newsid=1596
 

ã Copyright 1999 Larry C. Adams.
All rights reserved.
 

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