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Articles - Privacy & Security
I. ELECTRONIC FRAUD: A GROWING CRIME IN CANADA
As internet applications expand with the development of technology,
electronic fraud is becoming a growing problem
in Canada.
Personal information is often a requirement
to open new e-mail accounts, enter contests
and make purchases on-line, and the information
you give out is not necessarily private.
As a result, often times, we intentionally
provide false information, thus skewing the
results of the data being gathered.
According to the Canadian Bankers Association,
no-card, or card-not-present, credit card
fraud accounted for 10 per cent of total
losses for Visa and MasterCard in the last
fiscal year, ending June 30,2000. In this
instance, telemarketers and web sites will
obtain personal information to fill out fraudulent
applications for credit cards in the victim's
name.
No-card fraud is similar to fraudulent card
applications, which is defined by the CBA
as "the criminal impersonation of credit-worthy
persons to acquire credit cards". This
type of fraud accounted for five per cent
of total losses and affected more than 4,000
Canadian credit card accounts. Both types
of fraud represent the growing trend of electronic
fraud in Canada.
II. DON'T FEEL SO INSECURE
There is a growing concern that the information
we provide about ourselves is not being used
properly.
Smart cards offer
high levels of security
using a number of
methods such as encryption,
biometrics, PIN,
password protection,
digital
authentication or
signature and data
segregation.
Privacy protection begins at the manufacturing
level when each chip is given a unique number
and software locks on the operating system
and backup copies are put into place. Specific
data fields are written into the chip, so
that if the system does not receive correct
or complete information a lock will be placed
on the card to prevent further unauthorized
use.
Two types of locks can be placed on the card
when fraudulent use is suspected: a soft
or hard lock. A soft lock is applied by the
system administrator and can be removed once
the system receives correct information.
Hard locks are permanent, disabling the card
and the chip without allowing any data to
escape.
Encryption
This security tool ensures that no clear
text or data is transmitted. Only the intended
recipient is able to view the information
and if any data is lost while it is being
sent or received it will be unreadable.
Biometrics
Smart cards have the memory to apply this
advanced security method using fingerprint
matching, digital signatures for compatibility,
voice recognition and the experimental methods
of iris and facial recognition.
Data Segregation
The user can control who accesses the information
being transmitted; commonly the cardholder
and specific third parties. Users also have
the option to control how third parties access
the data. The data can be read-only or information
can be added, modified or deleted.
III. SMART CARD USE TO IMPROVE SECURITY
In the world of e-commerce, we have lost
that across-the-counter safety. You might
not know the merchant you are dealing with
and there is a good chance that the merchant
might be at the other end of the world. As
a result of this long distance relationship
between merchant and buyer, payment information
must be secure. Smart cards are the ideal
tool for this type of security.
After a four-year pilot, American Express
introduced the Blue Card in 1999. This card
is available for all qualified applicants
and cardholders in the United States and
the United Kingdom. It is scheduled to rollout
in Canada by the end of 2001.
A smart card reader
is connected with
the
cardholder's PC to
secure personal information
when placing orders
on-line, to ensure
data
security (money or
personal information).
The Blue Card system
provides identification
of the cardholder,
and also provides
authentication,
which details what
the cardholder is
allowed
to do (i.e, transfer
money or make purchases).
ACT Canada is an international non-profit
association for the advancement of card technologies.
We work on behalf of our members to promote
the awareness, understanding and use of all
advanced card technologies; including optical,
smart, capacitive and emerging technologies.
If you would like to learn more about ACT
Canada membership please visit the membership section of our web site or contact our office at
(905) 426-6360.
Please forward any comments, suggestions,
or questions to info(AT)actcda.com
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