Tuesday, April 7, 2009


Dear Mr.Obama and Mr.MacCane,

We wonder who is responsbile for eliminating Fraud, especially on Social Security Fraud. There are so many proposal to eliminate Fraud by leading technology of biometrics. For example, e-Smart, since 2001, has been proposing fingerprint match on card based on the request from Social Security Office so that fingerprint information never leaves the card for protecting privacy of card holders. e-Smart has successfly developed that and Korea is start usinng that.


Identity theft has been one of the major problems in this world. Within US itself there have been many cases of fraud caused by identity theft. Following are a few examples of identity theft fraud that have been listed in the http://www.usdoj.gov website:

Example1: Central District of California. A woman pleaded guilty to federal charges of using a stolen Social Security number to obtain thousands of dollars in credit and then filing for bankruptcy in the name of her victim. More recently, a man was indicted, pleaded guilty to federal charges and was sentenced to 27 months' imprisonment for obtaining private bank account information about an insurance company's policyholders and using that information to deposit $764,000 in counterfeit checks into a bank account he established.

Example 2: Central District of California. Two of three defendants have pleaded guilty to identity theft, bank fraud, and related charges for their roles in a scheme to open bank accounts with both real and fake identification documents, deposit U.S. Treasury checks that were stolen from the mail, and withdraw funds from those accounts.

Example 3: Middle District of Florida. A defendant has been indicted on bank fraud charges for obtaining names, addresses, and Social Security numbers from a Web site and using those data to apply for a series of car loans over the Internet.

Example 4: Southern District of Florida. A woman was indicted and pleaded guilty to federal charges involving her obtaining a fraudulent driver's license in the name of the victim, using the license to withdraw more than $13,000 from the victim's bank account, and obtaining five department store credit cards in the victim's name and charging approximately $4,000 on those cards.

Example 5: District of Kansas. A defendant pleaded guilty to conspiracy, odometer fraud, and mail fraud for operating an odometer "rollback" scheme on used cars. The defendant used false and assumed identities, including the identities of deceased persons, to obtain false identification documents and fraudulent car titles.

Above were just few examples to show how devastating identity theft can be for a victim. Incidences like there are becoming very common and proper measures needs to be taken by the US government and also governments around the world to counteract identity theft fraud.

1. Social Security Number is not a reliable identifier:
Dr. Ron Paul, a Republican member of Congress from Texas, proposed to the congress about implementing an Identity Theft Prevention Act. This act is discourages the use of social security number as national identifier because once the number is stolen, along with a fake ID, it would be easy for any person to impersonate the person whose social security number has been compromised. In the above examples there is a case in which one person opened many fake accounts in a bank using fake ID and then pooled all the money from fake accounts to his real account. These incidences indicate a serious flaw in the way a person is identified. Just based on given social security number and looking at an ID is not enough to establish that the person is who he claims to be. There is always a possibility that the social security number could have been stolen and a fake ID could have been made. In other words looks can be deceptive.
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2. Rely on Digital Technology than on humans:
Paper forms of identifying a person rely heavily on the skills and ability of a human to identify potential fraud and risk. Training personnel can help with fraud caused by paper records, but there is still an accepted level of human error that is permitted. By placing less reliance on humans to perform an ID check and more reliance on digital technology, the human error factor is reduced and higher efficiency rates can be achieved. Moving from a dependency of paper to a streamlined digital system is one way identity fraud risk patterns can be identified and mitigated.
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3. Utilize Fingerprint Biometrics to eliminate possibility of multiple fake ID’s.
Fingerprint biometrics are a leading digital technology that can be utilized in digital identity authentication. Those in a point of service setting that use fingerprint biometrics do so by scanning a customer's ID through a system and instructing the customer to use a keypad to match fingerprints with a stored fingerprint identity. Fingerprint biometrics help increase the chances that the person in front of you presenting an ID is that ID's true identity. The result is an ability to capture and link fingerprints to a single ID record, which will increase fraud prevention and help ensure fraudsters do not attempt to use multiple identities.
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4. Biometric Verification to link multiple IDs to single person:
Those in a point of service setting pay for fraud twice, once stemming from the initial act of fraud and a second time as a result of cost of goods, services and even insurance rates increases. Biometric verification can help resolve the problem of ID fraud and provide the point of service person that the customer presented is the actual person represented on the ID. The benefit of a biometric verification is that legitimate multiple IDs can be linked to a single person through one unique biometric fingerprint records. The additional benefit is that this unique biometric fingerprint cannot be utilized in multiple fraudulent IDs.
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Example 1: Biometric smart card for Social Security proposed:
Current Social Security cards have limited security features and have no photo or biometric data and thus can be easily faked. In an effort to help combat identity theft and fraud, U.S. Rep. Mark Kirk (R-Ill.) is proposing a new Social Security card that would be based on the same technology the U.S. Department of Defense uses for the Common Access Card. The proposed cards would feature a photograph and fingerprint, as well as a computer chip, bar code and magnetic strip.
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Example 2: New technology to protect pension funds from social security fraud:
Pension funds all over the world are confronted with the problem of misrepresentation for claiming pensions, which has resulted in huge loss to their legitimate beneficiaries. A Philippine-based pension fund has brought to the U.S. a technology mix that could put an end to fraud that often takes place in the delivery of social security benefits across nations. The Government Service Insurance System (GSIS) of Philippines unveiled on March 6, 2007 at the Philippine Center Building in San Francisco the GSIS Wireless Automated Processing System (GW@PS) to serve its pensioners and members in the area. The GW@PS is a home-blend of some of the most modern technologies—such as biometrics, smart card, and virtual private network—all working together to efficiently deliver social benefits while increasing safeguards against common claims fraud.
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Example 2: Trust in smartcards to prevent Internet and credit card fraud:
Internet fraud may perhaps one of the safest and economical ways of doing fraud, because for the person doing fraud there is no need to present any fake ID or give out social security number for online purchases. Perhaps that is why credit card fraud is 8 to 9 times more common in online channels than it is in traditional channels. If somehow a criminal minded person comes to know the credit card details and name of some other person then the criminal minded person can purchase products online using the credit card information of the other person. If a person losses his credit card or purse then at least he will take measures to cancel the card the moment he realizes it is missing, but if he has the card and just his information on the card is stolen then he will not realize his information has been compromised until he checks his credit card statement. If the person who is the victim of fraud does not check his credit card account periodically then he may not be aware of the fraud for a long time, resulting in huge loss for him.
One way to prevent internet fraud is by using biometric smartcards. Outfitted with a small microprocessor, smart cards perform all the functions of a traditional credit card, but provide greatly improved security as well as a range of specialized applications that take advantage of the card's ability to store and process personalized data. Smartcards are safer than credit cards because one can't just type a card number and expiration date into an online form or present the card to a sales agent at store or use it in a gas station. One must physically pass the smart card through a specialized card reader that communicates with the smartcard's built-in processor and data storage. Users can securely store personal data in the smartcards, which they can then share selectively to reduce the time they spend filling out tedious forms. Merchants can benefit because they can use the smart cards to offer electronic coupons or other special promotions aimed at improving sales and customer loyalty. Smart cards are also an excellent fit for multichannel sales because they are truly portable and can be used in a variety of settings--from physical stores to PCs to mobile phones--as long as those settings are equipped with card readers. People in European countries have been doing online and physical monetary transactions using smartcards for many years, but in the United States the technology is still new because the major credit-card companies didn't embrace the technology when it was first introduced--probably because it would have meant replacing billions of dollars' worth of existing technology. But now that the liability for credit-card fraud has shifted from merchants to card issuers there is considerable need for smartcards in United States to prevent fraud. Most analysts forecast fairly broad adoption of smart cards in the United States in the next two to three years.
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