Skimming, Identity Theft and How Online Business Defend Against Cybercrime

Over the past 5 years a scam known as electronic funds transfers at the point of sale (EFTPOS ) or skimming has been prevalent. Consumers commonly swipe both credit and debit cards through the in-store machines to pay for goods and services and hackers have been adept at coming up with ways to skim those customer cards.

In one such case, Romanian hackers were indicted when they were charged with remotely accessed hundreds of small businesses’ POS systems and stealing enough credit card data to rack up fraudulent charges totaling over $3 million. The hackers’ targets included more than 150 Subway restaurant franchises and at least 50 smaller retailers.

SCMagazine reports “An Eastern European criminal syndicate has hacked into a small Australian business and stolen details of half a million credit cards from the company’s network. In both cases, the syndicate captured credit card details using keyloggers installed within Point of Sale (POS) terminals and siphoned the data through an insecure open Microsoft’s Remote Desktop Protocol (RDP) connection. The syndicate found its victims by scanning the internet for vulnerable POS terminals.

Card skimming is just one of many ways that cybercriminals obtain access to stolen identities. And what happens once they have this information?  They begin hitting many of the major brand websites to purchase products that are commonly found in our homes and office.  How can retailers, ticketing companies, gaming sites and credit issuers protect their businesses and customers from fraudulent transactions?

Many start by identifying the device being used to access their website, through advanced device identification technology.  Is it a computer, laptop, tablet, mobile phone or another Internet-enabled device?  Is that a device that is already known to iovation’s cybercrime intelligence network? If so, has it been involved in fraudulent or abusive activities in the past? Often times, known bad devices have a history of credit card fraud, identity theft, account takeover attempts and other abuses. If the device comes back clean, is it related to other known bad devices?

iovation also helps its clients understand the web of associations between related devices, which helps businesses identify and shut down entire fraud rings. Lastly, online businesses run theirhighly-customized business rules as the transaction or activity is attempted. Many of iovation’s clients have more than 100 business rules on their site, that help them assess risk in real-time.  These business rules can trigger factors including velocity, device anomalies, proxy use, age of the device-to-account association, and more.

Last week at the Merchant Risk Council Platinum Meeting in Seattle, iovation demonstrated it’sReputationManager 360 fraud prevention service, and showed in simple terms, what happens during a real-time device reputation check.

Robert Siciliano, personal security and identity theft expert contributor to iovation, discussesidentity theft  in front of the National Speakers Association. (Disclosures)

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