Fraud Prevention Blog

How ID Authentication can help the war against terrorism

Posted by Sean Trundy on Thu, Jan 26, 2012 @ 08:50 AM

The world has changed much since September 11, 2001.  Awareness of how fragile our way of life can be, what steps must be taken to protect it and what might happen if we don't, is now a constant part of our national psyche.  It is probably safe to say that while the degree of American military involvement overseas may fluctuate with the times and conditions, the War on Terror at home likely will not.  Although anti-terrorism efforts are focused on potential overt acts of violence by international terrorist groups, it is specter of domestic covert acts intended to generate funding for terrorism that is at the forefront of our national security efforts. 

The Patriot Act expanded the concept of terrorism to include domestic terrorism.  The Act states, in pertinent part: 
(5) the term `domestic terrorism' means activities that--
`(A) involve acts dangerous to human life that are a violation of the criminal laws of the United States or of any State;
`(B) appear to be intended--
`(i) to intimidate or coerce a civilian population;
`(ii) to influence the policy of a government by intimidation or coercion; or
`(iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping; and
`(C) occur primarily within the territorial jurisdiction of the United States.'.
Detecting activities intended to finance terrorism is extremely difficult.  Financial institutions are not expected to distinguish terrorist financing from other criminal misuse of the financial system.  They are, however, tasked with ascertaining whether any transactions are suspicious, either because they are unusual or, by their very nature, are indicative of potential criminal activity.  

Money laundering is at the heart of most illegal financial transactions and is made possible through the use of identity theft.  Many measures have been enacted to require financial institutions and other businesses to detect and assist the U.S. government in preventing money laundering.  These include, among others, the Bank Secrecy Act, regulations from the Office of Foreign Assets Control, the Know Your Customer Act, the Fair and Accurate Credit Transactions Act and the Red Flags Rule developed by the FTC. 

Underlying these statutes, regulations and rules is the basic concept of identifying the person who attempts to conduct a financial transaction (e.g., a wire transfer, purchase of a money order, opening a new account, etc.) with the intention of ultimately funding terrorism or other criminal activity.  Because identifying the person suspected of engaging in such activity is paramount to any criminal investigation, priority is placed on identity verification. 

There are many identity verification tools available.  The Fraud Fighter™ line of identity authentication equipment provides the degree of technological sophistication and effectiveness necessary to ensure compliance with the laws pertaining to the monitoring of financial transactions and identity verification.Id Authentication Whitepaper   

Modeled on the same concepts used to secure IT networks from intrusion, Fraud Fighter™ will optimize organizations' regulatory compliance framework by helping structure an intelligently "layered" approach to the problem. "Layering", in this context, means targetting the appropriate level of technology at the appropriate level of threat. So, for those areas where risk exposure is minimal, lower end (and less expensive) equipment can be utilized, while higher risk activities are equipped with the higher-end, most technolgically advanced soutions.

Topics: verification of ID, I-9 compliance, Employee Verification, authenticating drivers licenses, authenticating driver's licenses, counterfeit ID, ID Verification

Fake Driver Licenses Create Problems for Access Security

Posted by Sean Trundy on Tue, Jan 24, 2012 @ 10:08 AM

In the past, fake ID’s have largely been associated with underage drinkers trying to get their hands on alcohol. But nowadays, fake ID’s have become so high-tech that they can be used for much more sinister purposes. For very little money, people can obtain fake ID’s online that trick most detection equipment. To make sure you aren’t falling victim to this new form of high-tech fraud, you need driver license authentication equipment that is able to protect your business.

Topics: identity theft, verification of ID, fraud news, counterfeit fraud, authenticating driver's licenses, counterfeit ID, ID Verification, counterfeit fraud prevention

ID Verification: Red Flags and Customer ID Programs

Posted by Gary Satanovsky on Mon, Nov 21, 2011 @ 12:25 PM

If you have followed the news at all lately, you have likely heard that financial institutions of all stripes are coming under greater scrutiny, with proposals for ever-tighter regulation still on the horizon. This includes not only bank lending and deposit activities, but also the manner in which all institutions vet their clients - former, current and future. In large part this is an attempt to mitigate identity theft. Creative identity thieves have been able to steal personal identification information  from thousands of accounts. Creating false identities and fake ID Documents to open new lines of credit has become easier than ever.

Topics: regulatory compliance, red flag rules, anti-money laundering, bank secrecy act, counterfeit ID, ID Verification, fraud prevention

Counterfeit IDs and Illegal Immigration

Posted by Gary Satanovsky on Thu, Nov 03, 2011 @ 03:56 AM

Topics: counterfeit fraud, counterfeit detection, counterfeit ID, ID Verification, counterfeit fraud prevention, fraud prevention

New Account BSA Identity Theft Prevention Compliance

Posted by Sean Trundy on Mon, Sep 19, 2011 @ 11:22 AM

Scenario:  A financial institution is opening a new branch, and is starting a major local PR blitz for new customer acquisition.  Great incentives are being offered for new account holders, and a large response is anticipated.  How does the bank process a flurry of new applications, yet conduct thorough “trust” identification verifications in a timely manner to prevent identity theft? 

Topics: identity theft, regulatory compliance, red flag rules, verification of ID, anti-money laundering, bank secrecy act, authenticating driver's licenses, counterfeit ID, fraud prevention

Identity Fraud - A Billionaire's Stolen Identity

Posted by Gary Satanovsky on Tue, Aug 23, 2011 @ 03:49 AM

Every so often an identity fraud story comes along in the news that is not only impressive in its own right, but also perfectly illustrates the need to verify that ID. One such case came to our attention quite recently, mainly for the identity of the victim as well as the staggering sum they lost to the thief.

Topics: identity theft, fraud news, counterfeit ID

A New Chinese Counterfeit Problem: Fake Driver Licenses

Posted by Sean Trundy on Thu, Aug 11, 2011 @ 11:39 AM

As if it weren’t already difficult enough to verify identity documents, now comes a new wrinkle in the game – high-quality counterfeit driver licenses produced by overseas factories.

Topics: identity theft, I-9 compliance, Employee Verification, bank secrecy act, authenticating driver's licenses, counterfeit ID

New Ultra-Violet Feature Driver License for ID Verification

Posted by Sean Trundy on Wed, Jun 29, 2011 @ 08:25 AM

Earlier this month, FraudFighter began providing advanced sample copies of our new Driver License UV Feature Reference Guide to select customers to get comment and feedback. 

Topics: identity theft, verification of ID, counterfeit detection, authenticating driver's licenses, counterfeit ID

War on Counterfeit Money & War on Drugs

Posted by Gary Satanovsky on Fri, Apr 08, 2011 @ 03:48 AM

Topics: counterfeit news, counterfeit ID, fraud prevention

Identity Authentication: ID Counterfeits Go High-Tech...and International

Posted by Gary Satanovsky on Wed, Apr 06, 2011 @ 04:04 AM

We have mentioned in a number of previous posts the international nature of many counterfeit money operations – and, as if to further reinforce how these are the best of times and the worst of times for retailers in regard to retail fraud, we present a story out of the nation's heartland, Philadelphia, and out of China.

But first, a few words about how these are “the best of times and the worst of times” for retailers and identity authentication. On the one hand, thanks to the power of the internet even mom & pop shops are now able to sell their wares all over the world. On the other hand, the same internet enables fraudsters to collaborate across borders in creating ever more realistic counterfeit ID cards, the scourge of every retailer. There is in fact now a whole shadow market, much like its legal counterpart but for counterfeit driver's licenses. China plays a key role in the latter, just as in the former.

The other obvious advantage to the international counterfeit trade is that it enables fraudsters to take refuge in regions where their operations stand the least chance of prosecution. While the manufacturing of any counterfeit currency is heavily punished within the borders of the United States, it is overlooked, if not actively encouraged in other nations, including China. The Tri-State area has seen a recent flood of Chinese-made counterfeits, and the results have been disastrous. One Philly bar owner was quoted saying “I don't want them to know it's hard for us to figure it out, but the technology is getting more and more scary”, while another, who not long ago was fooled by a fake ID and had to spend nearly a million in legal fees   , described the counterfeit ID situation as “terrible”.

Although we have in previous posts focused primarily on European and South American hotbeds of fraud, China also plays a key role. Taking advantage of laws allowing the proliferation of counterfeiting, China-based businesses make a living creating fake IDs for American teenagers, counterfeit driver's licenses to match fraudulent credit cards, and other identity documents of every conceivable shape and size for every illegal activity imaginable. Their products are quite convincing, too: in an apparent show of force, a Chinese fraudster group created a China identity card, virtually indistinguishable from the genuine article, for none other than Barack Obama. Since the summer months of 2010, Obama (at least according to the document) is a permanent citizen of the People's Republic. The implication behind the group's widely-publicized ID stunt was that they are quite capable of doing the same with any ID from any country.

Their gain is American businesses' loss: these fake IDs wind up being used to purchase expensive items on stolen debit and credit cards; to return purchases for cash anonymously; or - in the case of the aforementioned teenagers - to obtain substances restricted to minors. The cumulative cost of this fraud reaches into the billions – and that is not including legal fees for stores selling restricted items to minors.

Visual vigilance is always a good place to start in defending against these fakes. It works better on the proprietor of the ID rather than the ID itself. Inexperienced fraudsters usually act nervous at the checkout. Any unusual shiftiness or inability to make eye contact by a customer is good ground for suspicion. As for the document they present, whether it be Chinese in origin, or Mexican, or anywhere in between, it will still not likely pass the UV test. So invest in a good set of UV light counterfeit detectors, watch for suspicious behavior, and you will keep yourself safe from fraud.

Topics: fraud protection tips, counterfeit fraud, counterfeit detection, counterfeit ID, fraud prevention