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Online fraud: Thinking "outside of the box"

Created: 23 Jun 2008 • Updated: 08 Aug 2012
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By Yohai Einav, VeriSign Senior Fraud Analyst

I was on my way to the airport, chatting with my cab driver. After I told him my overused joke about the peasant, the seigneur and the miraculous goat, he asked me for my profession. "Oh, fraud?", he said. "You know, I almost lost $7,000 to card fraud last year".

So the sanguine driver told me how his bank called him, warning him he had gone into overdraft. When he investigated this he found that his Visa card had recently been charged with $6,000. He called Visa, and they told him - "Sir, didn't you make two £1,500 transactions in London two weeks ago?"

No, he was never in London. No, he rarely uses the British Pound in Israel.

"Time out", I said. "Credit card issuers know that this could happen, and no way could these two transactions have passed without Visa noticing them". Firstly, the amounts were high, and secondly, the driver's card had a consistent pattern of transactions in only one country. "Didn't Visa call you??" I asked. "No", he said, "the transactions were made on Yom Kippur, the holiest of the Jewish holidays, and no one in Israel was able to answer their phone". "No problem", the driver concluded, "Visa refunded my money the next day. They actually told me that they had dozens of fraud transactions on that same holy day".

I loved that story for one reason - it shows how the bad-guys constantly think outside the box. They knew that such a large scale scam would be detected on any other regular day, so they found a day when it wouldn't. They know what's inside the box, and then plan ahead.

Here's another story - a few years back I was analyzing a fraudsters' product called CC2Bank, which was basically a management tool for stolen credit cards. Release 1.3 of the tool enabled the bad-guy to type in any credit card number and learn the type of card, name of the issuing bank, the bank's phone number or the country where the card was issued. Yet it also had included another feature - "list of busy phone lines", with a geographical distribution of the phone numbers. Why was that of interest for the fraudsters?

Again - it was the think-outside-the-box attitude: on e-commerce sites the user needs to provide a phone number. So if you're a bad-guy you probably don't want to provide your home phone number, but you still need to provide some number. You obviously cannot use a random number, because the credit company is going to call it. So what do you do? You find a number that [1] geographically makes sense, and [2] is always busy. When the transaction validation call is made and the ringing tone is always be busy, the credit company will have to make a decision - are we going to pass on this transaction or not?

In most cases, you can already guess, such transactions will be approved.

This is not a new tactic, but a regular fraudster's strategy. Bad guys must use think-outside-the-box ideas since security companies already cover what ever is inside-the-box. The lesson for us in the security industry should be emphasized: never rest on our laurels; always try to cover what's outside of the box; occasionally think like a bad-guy; and never ever tell jokes about miraculous goats.