By Linda McGlasson
December 9, 2008
From Hannaford Brothers to Countrywide, this year has been full of
stories of criminal activity on the Internet, with hackers and phishers
wreaking havoc on computer systems and consumers, causing credit and
debit fraud numbers to soar.
What does next year hold for fraud against financial institutions? Here
are 10 of the new and old ways criminals will be looking to commit fraud
1. ATM Network Fraud
According to Paul Kocher, president and chief scientist of Cryptography
Research Institute, the number one area that institutions will see fraud
growing over the next year is in ATM networks. "When the criminal gets
access to magnetic stripe data and associated PIN values, they are then
able to create cards, and basically then it's a license to print money,"
Kocher explains. Another problem for institutions is that their ability
to perform risk management is significantly less on an ATM network than
online transactions. "This is because the ATM delivers the goods to the
consumer immediately to them, which is exactly what the fraudsters want
-- the cash, rather than a large ticket item they have to then fence or
resell," he concludes.
Kocher predicts that until U.S. financial institutions and credit card
companies roll out either a contact or contactless-based smart card
infrastructure, there won't be a great reduction in the amount of fraud
being perpetrated against U.S. consumers. "Once they decide to do this,
it will cause a great reduction in the amount of fraud, because we've
seen it happen in Europe," says Kocher.
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