Posts tagged ‘Fraud’

May 24, 2011

UK Government agencies lose £527 million in 2010/2011 to fraudsters

[Benedikt Hoffman, Financial Fraud News Contributor]

International Association for Asset Recovery:  The UK government is proving to be a soft touch for fraudsters as it lost taxpayer‘s money to fraudsters to the tune of some £527 million in the period 2010/2011 according to KPMG‘s Government Fraud Barometer published this May.

According to the report, in the past year, there was a 142 percent uplift in fraud incidents against government agencies.

Whereas, the high level of fraud incidents against government agencies had decreased in 2007/2008 as a result of the government’s focus on value added tax (VAT) cheats which led to a high number of prosecutions in that year, but the focus on tax skimming by fraudsters has returned with a vengence according to recent trends.

Around 114 tax fraudsters were prosecuted in the past year in cases representing around £527 million in thefts (up from £277m in 2008/09).

According to Jeremy Outen, UK Head of Fraud at KPMG: “Financial criminals are now becoming more businesslike and methodical ….The current generation of organized crime is targeting fraud – making payment systems, such as banking, tax and benefits vulnerable to attack…..Traditionally, criminals have relied upon physical acts, such as robbery – they can now commit a fraud and achieve the same returns for much less risk. This is fuelling the audacity and ambition of professional criminals, driving up the size of a fraud…..In addition, technology and large scale processing (such as online or call centers) have made large scale frauds easier to accomplish.”

Read more….

March 25, 2011

Check your credit card statements for small, strange debits – chances are that you are being scammed

According to a recent  BankInfoSecurity report, a vintage credit card scam has reappeared in France which is different from the now most popular card reading and duplicating  methods.

This time, it seems that the fraudsters did not have to spend a lot of time on technical solutions as the forged cards are likely to have nothing more that the bank‘s ID number.  Notwithstanding, the fraudsters are getting the cards to work.

A US International Airline Employees Federal Credit Union got targeted first with the scam when at the beginning of March the employees noticed strange transactions being done with their IAEFCU Visa cards, although not exceeding $15 at a time.

IAEFCU informed its card insurance company, but the damages were not great enough to persuade the insurer to start an investigation. The company’s payment processor was not that interested in stopping the transactions either because of the small amount of money being siphoned off.

But, credit card safety experts are pointing out that the scheme has been on the go since  the 1990’s and the reason for its continuance is the inherent weakness of banks’ online facilities such as ‘credit master’ etc. According to Mike Urban, a senior director of fraud management at FICO,  a company providing analysis services: ‘Fraudsters use these applications to create legitimate card numbers for a given BIN, which is easy for them to find online. It may not be an active card number, but it could be a possible or potential card number……they then test the BIN by just running it through. It creates an algorithm.’

However, specialists have confirmed that there is no reason for fear. Without more card information than its number and the bank’s ID, large  transactions can never get authorized. But as for the existing problem, the solution for the banks is quite simple:- avoid issuing card numbers in sequential ranges, which makes applications such as credit master and credit wizard less effective.

[Financial Fraud Contributor]