The document discusses the history and current trends of fraud in the Pacific Northwest region, detailing various types of fraud that have occurred in the 1980s, 1990s, and today, including ATM fraud, identity theft, check counterfeiting, and account takeovers using methods like social engineering. It also provides information on tools and systems that can help detect and prevent such fraud, as well recommendations for training, education, and monitoring practices to address fraud risks.

1. Counterfeiting - Detection
and Prevention
Fraud in the Pacific NW
John Snodgrass, CAMS - Security Risk Manager
Boeing Employees Credit Union

2. The History of Fraud
80’S
– UIBC Fraud
– PIN Based ATM Fraud
– Lost/Stolen Visa
90’S
– Return Deposits/New Fraud Accounts
– Home Mail Theft/Chemical Washing
– Introduction of Versacheck
– Debit Card Fraud
Today
– Merchant Breaches – partial vs. full track
– Verified by Visa/MasterCard Secure Code
– Plastic Card Fraud (Skimming/Card Capture)
– Return Deposits/New Fraud Accounts
– Versacheck
– Identity Theft
– Internet Scams (Key loggers, Phishing, Spoofing, Nigerian, Wire
Transfer, Vishing)
– Counterfeiting (Money Orders, Cashier’s Checks)
– Trail Heads/Gyms’s
– Relationship with BSA

3. Recent Compromises
Heartland
Avianca
Sur Le Table
Chipolte
Polo/Ralph Lauren
Card Service Solutions (CSSI) 40 mm
Designer Shoe Warehouse (DSW) 1.4mm
TJX (TJ Maxx, Marshall’s) 45.7mm
Monster.com 146,000

4. New Account Fraud/Repeat
Offenders
The same fraud rings lead multiple attacks
As ring leaders leave, others fill that gap
Why do they continue?
Fearless
Sentencings
Worth the price of “admission”
Intelligent
Awareness of your policies/procedures
Organized Crime

5. Check Counterfeiting
Versacheck
– Routing and Transit Numbers
– Magnetic Ink
– Watermark
– Microprinting
– In-clearing items – possible merchant
In-
loss
– Deposit items – possible FI loss
– Check Stock

6. Account Takeover
Address Changes
Card/PIN Requests
LOC/HELOC Fraud
– Social Engineering
– Fraudulent payments followed by
– Advances into check and savings
– Wire Transfers

8. MSR206 HiCo/LoCo Magstripe Card Reader / Writer
Price: $750 - Now available in USB interface!
Desktop Card Systems
Datacard® UltraGrafix® 800 Card Personalization
System
Fast, affordable card personalization
The MedAssure™ 295 card personalization system lets you
issue high-quality ID cards—with your choice of
embossed characters, bar codes, logos, text,
personalized smart card chips and
encoded magstripes—in a fast, single-pass operation.
Retail Price: $54.00
DiscountID: $40.50
CR80 Graphic-Qual 30mil PVC Cards 500ct

10. In our first slide you
see an individual
who is apparently
making a bank
transaction at the
ATM.

11. He is really placing
a trap in the ATM
machine to
“capture” the next
user’s card.

12. Lookout Warning
These individuals
work in teams. The
lookout warns of
any possible eye
witnesses / or of the
next potential
victim.

13. The Victim
Here we see the
next member using
the ATM after the
trap has been set.
He inserts his card
and begins his
transaction.

15. Accessing the PIN
Victim is
convinced he can
recover the card, if
he presses his PIN
at the same time
the suspect
presses “cancel”
and “enter.”

16. After several
attempts the victim
is convinced his
card has been
confiscated.

17. Recovering the CARD

18. The Trap
The trap is made up of
XRAY film, which is the
preferred material by
thieves simply because
of the black color which
is similar in appearance
to the slot on the card
reader.

19. Placing the TRAP
The trap is then
inserted into the ATM
slot. Care is taken not
to insert the entire film
into the slot, the ends
are folded and contain
glue strips for better
adhesion to the inner
and outer surface of the
slots.

21. Retrieval of Confiscated Card
As soon as the victim is
gone, and they have
your PIN, the thief can
remove the glued trap
by grasping the folded
tips. He simply pulls the
trap out that has
retained your card.

22. Best Practices
Educate your Board and Executive Management
Education of 1st and 2nd line Servicers
– Routinely examine the ATM façade for traces of:
Adhesive
Tape residue
Camera tampering
Any unusual attachments
Regular Review of ATM Lighting
Pay attention to ATM down times
– Do you have any monitoring triggers?
– What are your response times?

23. Best Practices (cont.)
Member/Customer Training
Leverage vendor relationships
– What solutions are being developed?
developed?
Inhibitors
Jitter Software
Foreign Device Recognition
New Facias
SHARE INFORMATION
– Participate in your local fraud & robbery
meetings

24. Training/Education
Community Relations
– Strategic Business Partners
– Member/Customer Seminars
– Member/Customer Newsletters
– Web site enhancements
– Safety tips
– New trends
– Rotary, Elks, Kiwanis, Senior Citizen

25. Case Monitoring
Two or more “like” cases
Run CPP test
Identify window of exposure
Define your Card Compromise Strategies
– Block/reissue as needed
– Member/Customer notification

26. CREDIT MASTER/CREDIT
WIZARD
Internet Program
Created by Hackers
Contains BIN Numbers and Algorithms