Conference outlines reach of online fraud

An 80-year-old Billings man wires $10,000 to the Dominican Republic to get his grandson out of jail in Quebec.

A Montana woman wires $30,000 overseas to "save her nephew."

Altogether, Montanans lost a total of $68,000 in 2010 to this scam.

"The minute somebody wires someone overseas, that money is gone forever," said Montana Attorney General Steve Bullock, one of the speakers at a fraud prevention seminar sponsored by MasterCard on Wednesday morning at the Hilton Garden Inn in Billings.

Everybody who has an email address gets hit with so-called "phishing" scams, where con artists promise they've won a lottery or an iPad and must send money first.

"Anytime somebody receives an email that sounds too good to be true, it probably is," he said.

Bullock made those comments in a Gazette interview, adding that because of the shame involved, the fraud reported to his office is only a fraction of what is happening.

Ravi Aurora, MasterCard's vice president of information technology security, said the electronic ecosystem is changing so rapidly that today 2.2 billion people, out of 7 billion worldwide, have Internet access. That's a 500 percent jump in 12 years.

FBI special agent John Teeling, who attended the seminar, said that his agency fields about 1,000 calls per day about fraud, crimes that rob Americans of an estimated $1 million to $2 million every day.

Senior citizens should have special credit cards with an extra password or some other fraud protections, Teeling suggested. And he advised consumers and businesses to never respond to emails asking for personal data.

"Banks and stock brokerage companies, your Visa company, MasterCard, they are never going to email you and say, 'Please give us your account information,'" he said.

The sponsors' presentation was heavily spiced with promos for MasterCard's services. Company speakers also lobbied against the Durbin Amendment that took effect last October and capped "swipe fees," debit card interchange fees. That change cut costs to merchants, but was a major financial hit to companies that issue the cards, including Visa and MasterCard.

Before the change, the Merchants Payment Coalition said Americans were paying on average 2 percent per purchase, while Europeans paid 0.25 percent in swipe fees.

The seminar was organized by Barb Skelton of Billings, who represents MasterCard in Montana.

Ninety percent of card fraud today is from counterfeiting, using lost or stolen cards and Internet fraud, Aurora said.

"Fraud is like a balloon. You puff it out and then look for the weakest link," Aurora said.

Security measures by credit card companies have cut the cost of global card fraud from 15 cents per $100 about 10 to 15 years ago, to 8 cents per $100 today, Aurora said.

But fraud is easier and cheaper now than ever.

-- $200 "skimmers" can read cards swiped at cash registers.

-- Pinhole cameras that match the color scheme of ATMs can be placed on the machines to steal card data.

"Always, when entering your pin number, shield it," Aurora said.

Business owners should watch out for "repair technicians" or employees who can install malicious software on a computer or plug in a device to steal sensitive information. Outsiders make 92 percent of the attacks, while business partners steal data less than 1 percent of the time, he said.

A few years ago, cyber thieves stole from the largest companies, but now they are targeting smaller ones, especially food and beverage, lodging and retail businesses, said MasterCard's Erik Mueller.

"They're starting to figure out they can go after the small fish and collect lots of information," he said.

Source: http://billingsgazette.com/news/local/conference-outlines-reach-of-online-fraud/article_36e2c534-f4b9-5687-ab1b-4e5444e1376d.html#ixzz1pt2pG8ae