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Date Posted: 22:14:49 01/25/04 Sun
Author: Holly
Subject: Internet banking scam helpers face jail

Internet banking scam helpers face jail
26 January 2004
By RICHARD WOOD

The police are threatening prosecution and jail time for those who assist in internet banking scams, even if they do it in ignorance.


Two weeks ago, a thief in Latvia used "Trojan key logging" software to find out a password and steal $3000 from a Westpac customer in Auckland. The bank compensated the customer.

The thief used the bank's electronic payment feature to transfer the money to the bank account of a Christchurch man, who forwarded it overseas.

Police national e-crime manager Maarten Kleintjes says the police are still considering what action to take regarding the Christchurch man as he didn't know he was doing anything illegal.

Mr Kleintjes says the man had been through a recruitment process on the Internet and believed forwarding the money was part of his "job".

Mr Kleintjes says not knowing money is stolen is not a defence and from now on people should be aware that if they get involved "there will be consequences".

Money laundering carries a maximum penalty of between seven and 10 years imprisonment.

Police are asking anyone who has been offered a commission for passing on funds through Internet banking to be suspicious and identify the recruiter to them.

They also want to hear from anyone who has already been recruited but is waiting for their first transfer.

Recruited agents are told the money has to go out the same day, usually through a Western Union money transfer.

In a second Westpac case, the bank prevented itself being defrauded of $15,000 by stopping a fraudulent transfer the day the money was due to be transferred overseas from a customer's account.

Mr Kleintjes says Westpac is not the only target. In another case, BNZ log-in and password details were used in an attempt to access a Westpac account.

"We believe all banks are being targeted. This is not the end – it is the beginning".

He says he has asked all the banks how long it will be till they improve security on their online banking systems by introducing tokens or one-time use passwords.

A one-time password system used at a bank overseas involves customers being supplied with a book containing a couple of hundred passwords which they use once and mark off as they go.

Another approach is to use a "two-phase" authentication procedure. For example, banks could automatically text message a temporary access code to customers' cellphones, once customers have keyed in their permanent Internet banking password.

This security technique means scammers would have to be in possession of a customer's cellphone as well as their password in order to initiate a fraudulent Internet banking transaction.

Mr Kleintjes says banks weigh up the risk and benefits of making online banking accessible and easy to use, but "the balance is changing" toward a need for better security.

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