Computer Fraud & Security Bulletin October 1993

Phone company refuses calls Hacker fined after guilty plea

The Jamaica Telephone Co no longer

accepts calls from North America due to

fraudulent calls originating in Toronto, New York

and Miami, according to a report in the Globeand

Mail. The cancellation aims to stop the illegal use

of telephone equipment, which cost the company

more than $60 million last year. They have also

banned the use of telephone credit cards for

international calls made from pay phones in

Jamaica. Though the company did not get paid

for the illegal calls it still had to pay for the use of

the equipment needed to connect the calls. The

Prime Minister, P.J. Patterson, has promised that

the collect-calling service will be restored as soon

as the company installs a security system to

prevent abuse.

Luo-qi Chen, 23, a former Princeton University doctoral student in physics, has been fined $500 following a guilty plea, according to a report in the New York Times. He illegally gained access to the school’s computer system and could have faced six months in jail and a fine of $1000. By pleading guilty he was guaranteed no prison sentence. He had hacked into the network through ‘intellectual curiosity’ and was expelled from the University, though he was not deported to his native country, China.

Card companies unite to fight fraud

Singapore shops sell pirated software

A report in the China Post states that pirated

editions of Taiwan-developed video game

software have been discovered for sale in shops

in Singapore. The material accompanying the

packs is of excellent quality making even the

pirated versions look good. The Business

Software Alliance focuses on Singapore,

indicating that American firms lose millions of

dollars each year there. It seems that Taiwan has

also become a victim of the counterfeit software

business. Each batch of pirated software

amounts to 1500 sets at the price of NT$300

(US$ll.ll) each, much lower than the originals.

“The Singapore pirate groups are really

professional and organized because they are

bold enough to put these things on the shelf, not

under the table”, said a Taiwan manufacturer.

The Taiwan software industry loses NT$60

million (US$2.22 million) each year to pirated

software packages sold in Hong Kong and

Singapore. Local companies hope the

government will take action to prevent further

pirating of software.

Globally, banks are joining together and embarking on a three-year programme to fight fraud, according to a report in the international Herald Tribune. Card companies are reluctant to disclose how much fraud costs them, but a recent estimate for the UK, put the figure at f250 million. The companies have banded together to raise over f750 million to fight fraud by making customers and retailers more aware of how to keep their cards safe. One of the campaigns biggest successes has been in encouraging store employees to be more vigilant. Banks have organized seminars warning people of what body language to watch out for.

A major part of the campaign focuses on updating card technology and it is hoped that the latest advances in card authentication and client verification will keep the banks ahead of the criminals. In France, the widespread use of PIN numbers at the point of sale has reduced the level of fraud from 0.148% of all transactions in 1989 to 0.05% for 1993. Another possible method to keep ahead of the criminals is to replace the magnetic strip on the back of the cards with electronic chips. These can store more information and are harder for the fraudsters to manipulate.

Further in the future is the possibility of biometrics. Clients have to give physical proof of their identity, for example, using finger scanning or dynamic signature verification.

01993 Elsevier Science Publishers Ltd