© 1996 by British Computer Society
Seeking after the truth in computer evidence: any proof of ATM fraud?
Dr Stephen Castell MBCS formed Castell Computer and Systems Telecommunications Ltd (‘CASTELL’) Management and Financial Consultants in Information Technology in 1978. He was a senior applied mathematician and research manager in industry before joining Touche Ross & Co as a Management Consultant, working on a variety of commercial computer systems projects, particularly in the banking and finance sectors. Prior to forming his own consultancy company, he was for three and a half years Group Management Services Manager for Bremar Holdings Limited, international merchant bankers, where he was also involved in corporate finance and venture capital business. Dr Castell is well-known for developing businesses in voice telephony (National VoiceNet), data broadcasting (BBC Datacast), satellite communications (BBC Eurocast, BT Shield) and on-line information services (BBC Data, Infolex); and in driving the discussion of the ‘legal reliability’ of information systems and technologies. As an expert witness in computer litigations he has acted in many cases including the largest computer action to have come to trial in the English High Court. He is the founder of Channel 5 Digital Television plc. CASTELL 20 Grange Road, Wickham Bishops, Witham, Essex CM8 3LT. Tel: 01621 891776. Fax: 01621 892553. Email: cstll01{at}ibm.net
‘The revelation that Save & Prosper, the retail banking arm of Robert Fleming & Co, has been the victim of a £200,000 credit card fraud...shows how easy it can be to fool...card security systems. Details of customers’ cards were stolen and encoded on to other cards, such as those for petrol points. The bank suspected internal collusion after print-outs containing card details went missing, but an enquiry proved inconclusive. All affected customers have been reimbursed. Last month, it was revealed that £130,000 had been stolen from Abbey National cardholders during 1994 and 1995 with counterfeit cards. Andrew Stone, a bank security consultant who had been advising Which?, the magazine of the Consumers' Association, was jailed for five and a half years for the theft. This fraud involved spying on Abbey customers as they used their cards in automated teller machines (ATMs) or cash dispensers... [Stone] recorded card details and personal identification numbers (PINs) using powerful video cameras. The details were then encoded on the magnetic strips of other cards. Although all 500 victims were reimbursed by the bank, the stolen money has not been recovered... Such cases have highlighted yet again the serious issue of plastic card security...Card-issuers have been forced to admit that their security systems are not infallible and that ‘phantom’ withdrawals from ATMs are not always explained by the cardholder's negligence, or fraud by friends and relatives...’
From ‘Where the bucks stop’, Matthew Wall, Financial Times, October 19, 1996
‘Experts agree...that technological failures account for only a tiny percentage of ATM losses’
From ‘Phantom withdrawals continue to haunt banks’, Financial Times, Alan Cane, September 21, 1996