ID fraud costs country R40bn a year

Fingerprint-it presents

ID fraud costs country R40bn a year

By Edwin Naidu

As government goes ahead with its plans to introduce new "smartcard" identity cards, criminals are fleecing the South African economy of billions of rands.

"Thefts through the use of the bar-coded identity document are causing many problems and something has to be done quickly," said Pat Cunningham of South African Fraud Prevention Services.

Cunningham said the organisation had a list of 45 000 names on its database of people who had committed fraud by using identity documents that did not belong to them.

The database, which is shared among several industry players, helped to prevent fraud of a possible R400-million last year.

'The buoyant economy over the past few years has fuelled fraud'

"All major banks, furniture and supermarket retailers, microlenders and motor finance corporations linked to our organisation reported a huge increase in fraud."

Cunningham said fraud through improper use of identity documents went up by 29 percent last year to an estimated R40-billion.

Delegates at a conference hosted by PriceWaterhouseCoopers in Sandton last week were told that white-collar crime was costing the economy an estimated R80-billion, with more than 40 000 cases a year reported.

Green ID books with a barcode are already commonly used. The book contains a photograph and fingerprint of the holder, but the photograph can easily be replaced. The government plans to replace the green book with a barcode on a credit card-style ID with personal details stored on a microchip.

Although the government originally considered issuing the smartcards for free and charging for subsequent replacements, it will charge around R120 per person during the R1,5-billion roll-out expected to occur over five years.

'We are putting all fingerprints collected when individuals apply onto a digital system'

The smartcard will also replace the old reference books and blue pass books which, although accepted as ID by some financial institutions, do not allow the bearer to vote. Only South Africans with a bar-coded identity book are allowed to vote.

The current ID book has been described by home affairs officials as easy to forge, allowing criminals to take advantage of delays in introducing the new card.

"The buoyant economy over the past few years has fuelled fraud," said Fred Steffers, managing director of the Consumer Profile Bureau (CPB). He said crimes involving the fraudulent use of identity documents were costing the economy billions of rands.

"Fraud is escalating on a daily basis. Using the identity document is an easy way to commit a crime and the chances of getting caught are low," he said.

Credit was easily available because of the booming economy: "In some instances one need only provide an ID number and address to obtain credit. Three months later the original owner of the number is chased for non-payment."

The home affairs department has also received thousands of complaints of the use of ID documents in fake marriages.

Nkosana Sibuya, a spokesperson for the department of home affairs, said the department was still in the planning stages of introducing the smartcard ID.

"We are putting all fingerprints collected when individuals apply onto a digital system. We hope to finish by September and then start rolling out the smartcard," he said.

The government had allocated R270-million to the ID smartcard project, another R132-million for back-record conversion, R44,4-million for an electronic document management system, R15,2million for the redesign of a population register and R72,2-million for the rewrite of the movement control system. Tenders for the issue of the smartcard would go out once the cabinet had given its approval, Sibuya said.

The home affairs national identification system (Hanis) project consists of three components: the automated fingerprint identification system (Afis), the integration of systems, and the smartcard.

"We have moved to implement the two first components with the introduction of the electronic document management system as well as a back-record conversion process to convert all fingerprint records to electronic format to allow for online biometric verification. We are targeting to complete the digitising process by September," Sibuya said.

It was hoped the first ID smartcards would be issued by the end of this year. The first recipients of the cards will be beneficiaries of state social development grants.

CIO Jury: Will biometrics replace passwords and PINs?

CIO Jury: Will biometrics replace passwords and PINs?
The 'eyes' have it as IT bosses give fingerprint and iris scanning the thumbs-up

By Andy McCue

Published: Thursday 16 February 2006

Iris and fingerprint-scanning technology will replace passwords and PIN numbers as the long-term answer to identity management problems, according to UK IT chiefs.

An overwhelming majority of IT bosses - 11 out of the 12-man silicon.com CIO Jury IT user panel - predicted biometrics will overcome the current technical and standards issues to be a more user-friendly and secure alternative to passwords.

Kevin Fitzpatrick, CTO at Manpower, said: "As a user of an IBM fingerprint protected laptop, I am a convert. It provides quick and secure access. The advantages of biometrics are for truly mission critical security and/or ease of access. When these apply we will see growth."

Biometrics will replace passwords in many institutions in the next 18 months via fingerprint recognition for authenticated sign-on and via iris and facial recognition for physical building access, according to Graham Yellowley, director of technology at Mitsubishi UFJ Securities International.

He said: "Bloomberg have already deployed a biometric keyboard to authenticate users and many institutions are looking at implementing fingerprint recognition to provide a fully authenticated sign-on, though this will not be the single sign-on that most firms are aspiring to."

Mark Devine, IT director at ACCA, said: "It is generally accepted that technology will deliver a useable quad-band/G3/PDA/television/MP3 that works in the jungle or the desert and is also waterproof to 200m. Given this level of micro-electronics and processing ability is there any doubt that current issues with biometrics will be overcome? Thereafter, like most pervasive technology, it's a matter of cultural resistance."

Paul Broome, IT director at 192.com said biometrics are preferable to Bill Gates' vision that Microsoft will aggregate a users' passwords and account information with a new product called InfoCard.

Broome said: "Yet more mirth from Microsoft regarding security - we will trust them to roll up and hold all our passwords? It's more secure writing them on your shirt cuffs."

A slightly more sci-fi vision of a biometrics future was painted by Nick Clark, director of IT services at Tower Hamlets College.

He said: "In the longer term I expect identity will be via an implant, and we will be connected permanently to the net. I don't mean a Borg collective consciousness as we will all be individuals. It's going to be just like the mobile phone, creeping into our lives until we think we can't do without it and so won't even think of disconnecting."

But Neil Hammond, IT director at British Sugar, said he favours existing identity management technology over the "Hollywood glamour factor" of biometrics.

Hammond said: "I can't see biometrics replacing user ID and password as the basic mechanism for routine security because that is easy to set up and administer. For more secure identification I still see the tried and trusted Secure ID token as the preferred mechanism for a while yet."

Today's CIO Jury was...

Paul Broome, IT director, 192.com
Nick Clark, director of IT services, Tower Hamlets College
Colin Cobain, IT director, Tesco
Mark Devine, IT director, ACCA
Michael Elliot, IT director, Hasbro
Kevin Fitzpatrick, CTO, Manpower
Mark Foulsham, CIO, eSure
Neil Hammond, IT director, British Sugar
Rory O'Boyle, head of IT, The Football Association
Jacques Rene, director of IT and projects, Airclaims
Davesh Shukla, head of IT, London City Airport
Graham Yellowley, director of technology, Mitsubishi UFJ Securities International

Finger scans replace cash at Gonzaga

SEATTLE POST-INTELLIGENCER
http://seattlepi.nwsource.com/local/6420AP_WA_Gonzaga_Finger_Swipes.html

Monday, February 13, 2006 · Last updated 10:16 a.m. PT

Finger scans replace cash at Gonzaga

THE ASSOCIATED PRESS

SPOKANE, Wash. -- About 400 students at Gonzaga University are among the first in the nation to use finger scans to pay for meals and other expenses in the campus area.

Sodexho Inc., the company that runs food service operations at Gonzaga, has launched pilot programs at the Spokane school and the University of North Texas to see if "biometric finger scans" are workable.

Spokeswoman Sarah Cody said Sodexho will see how well they work before deciding whether to use the technology at some of the 900 other campuses the company serves.

Scott McCoy of Fair Oaks, Calif., uses a finger swipe to pay for things like pancakes at Arny's, a Gonzaga area diner.

"It made my parents more comfortable giving me money, because they know what I spend it on," McCoy said.

The program, known as iMye, operates like a gift or debit card. Students or their families deposit money into an account that can be managed online. At campus cafeterias and coffee shops, students use their fingers like cards a scanner reads the print and performs the transaction.

The program doesn't use fingerprints or maintain a database of them. Students have their fingerprints scanned, but the program uses algorithms to create an identification based on a series of numbers. No images of the fingerprint are kept, the company said.

Vijay K. Sharma, vice president of sales and business development for iMye, said Friday that the finger scans are more secure than cash or credit cards.

"If my mother were asking me that question (about security), I'd say, 'Mom, signing your name to a receipt for a credit card and handing it over the counter to somebody you don't know compromises your security much more,'" he said.

Sharma said the system gives parents more knowledge about their children's spending, and can't be used to buy alcohol.

Nick Perrault, president of the GU student body and an intern working to promote the program, said the fingerprint issue has caused some concern among students. But that generally passes, he said.

"There's kind of a cool factor," Perrault said. "Just being able to put down your finger and not whip out a card."

Let your fingers do the shopping

Let your fingers do the shopping

Kurt Steffen, manager of Cub Foods on South West Avenue, uses the store's newly installed Pay By Touch checkout system, which recognizes his fingerprint and automatically debits the purchase amount from his checking account. Photo by Joe Tamborello

Local Cub Foods offers high-tech option for payment at checkout

By Gary Mays, The Journal-Standard

FREEPORT - It's not “Big Brother.” It doesn't store your fingerprints for the thought police to plant somewhere, or sell your personal information. And, by the way, it's a convenient and highly secure way to pay for groceries.

Those sentiments may have come in handy for employees of Cub Foods, a Freeport store that's been a showcase for some of the newest trends in retailing innovation in recent months. The trend began months ago with self-pay kiosks, which store officials say have been a hit, even among their many older customers.

But the thing that has people talking, and educating customers, is the Pay By Touch system, in which customers who sign up for the service need only swipe a finger over a small scanner to pay at the cash register. Once a shopper opens an account using a kiosk at the busy store, the biometric image - not a fingerprint - of their finger is linked to a bank account. Biometric technology maps features of eyes, hands and fingers that are unique to each individual.

When a shopper scans his or her finger on future visits - usually two fingers are scanned - that unique profile is instantly recognized, and the money taken from an account. Only about 5 percent of the population are unable to participate in the program due to such idiosyncrasies as odd-shaped or damaged fingers.

Pay By Touch also is capable of consolidating any loyalty and discount cards into a customer's profile.

According to Store Manager Kurt Steffen, it's not all that different from using a debit card - it just doesn't take quite as long. And if you happen to forget your wallet or leave it in the car, you are still in business with Pay By Touch. Some experts also tout the fact that Pay By Touch can reduce consumer reliance on credit because the system is typically linked to a checking account, and consumers are more likely to use the most convenient option, such as, in this case, an appendage.

The system also can link to accounts set up for recipients of government food assistance, something store officials say helps eliminate the social stigma of using food stamps or LINC cards to buy food.

“That is a major plus,” Steffen said. “No one knows how you are paying.”

As for those shoppers prone to Orwellian paranoia, Steffen said there's no cause for alarm. Personal data is secure, and will never be sold to any outside vendor, he said.

Rose Bear, front-end manager at Cub Foods, has helped roll out the new system to employees and customers. As part of the campaign, Cub employees are sporting lime green T-shirts inviting shoppers to ask them about Pay By Touch. She said that since Feb. 1, when the program began, the store has enrolled about 200 shoppers.

“It has been going very well,” she said, adding that complaints and concerns about Pay By Touch technology, while spirited, have been few and far between. Same goes for the store's relatively new self-checkout machines, which Steffen said were introduced as another convenience option for shoppers, not as a way to replace staff with machines.

The biometric payment technology at Cub Foods and other national chains comes courtesy of San Francisco-based Pay By Touch, which is emerging as an industry leader in retail technology solutions. The company is gobbling up smaller players in what used to be a niche market, and currently boasts a 7,000-store client base.

In addition to competitive advantage, the finger-scan technology saves the store money by reducing fees paid to companies that process credit and debit card transactions.

Brown drums up support for biometrics

Brown drums up support for biometrics
by Antony Savvas
Wednesday 15 February 2006
Chancellor Gordon Brown has been praising the use of biometric technology for cross-border control, anti-terrorist activity and to combat identity theft.
Brown said that if biometrics could be used by US supermarkets and Japanese banks, the technology could be put to government use too. “With passports now requiring biometrics
Article Continues Below
80% of the adult population will have to register their biometrics to ensure our borders are secure and so they can travel freely across the world.”
Brown added, “Already one million people have bought and used an IBM laptop which uses fingerprint recognition to control access.”
He said manufacturers were now looking at the same fingerprint recognition technology to make mobile phones and MP3 players worthless if stolen.
Brown said that 40 other countries plan to introduce biometric passports by the end of the year.