EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Cyber crimes are any illegal activities committed using computer target Cyber crimes are any illegal activities committed using computer target of the criminal activity can be either a computer, network operations. Cyber of the criminal activity can be either a computer, network operations. Cyber crimes are genus of crimes, which use computers and networks for criminal crimes are genus of crimes, which use computers and networks for criminal activities. The difference between traditional crimes and cyber crimes is the activities. The difference between traditional crimes and cyber crimes is the cyber crimes
cyber crimes can can be be transnatiotransnational nal in nature. in nature. Cyber crime Cyber crime is is a a crime crime that isthat is committed
committed online online in in many many areas areas using using e-commerce. e-commerce. A A computer computer can can bebe the target of an offence when unauthorized access of computer network occurs the target of an offence when unauthorized access of computer network occurs and on other hand it
and on other hand it affects E-COMMERCE.affects E-COMMERCE.
Cyber crime can be of various types such as Telecommunication Piracy, Cyber crime can be of various types such as Telecommunication Piracy, Electronic Money Laundering and Tax Evasion, Sales and Investment Electronic Money Laundering and Tax Evasion, Sales and Investment Fraud, Electron
Fraud, Electronic ic FundsFunds Transfer Fraud and so on…The modern contempor Transfer Fraud and so on…The modern contempor aryary era has replaced these traditional monetary instruments from a paper and metal era has replaced these traditional monetary instruments from a paper and metal based currency
based currency toto ―plastic money‖ in―plastic money‖ in the form of credit cards, debit cards, etc. the form of credit cards, debit cards, etc. This has resulted in the increasing use of ATM all over the world.
This has resulted in the increasing use of ATM all over the world.
The use of ATM is not only safe but is also convenient. This safety and The use of ATM is not only safe but is also convenient. This safety and convenience, unfortunately, has an evil side as well that do not originate from convenience, unfortunately, has an evil side as well that do not originate from the use of plastic money rather by the misuse of the same. This evil side is the use of plastic money rather by the misuse of the same. This evil side is reflected in the form of ―ATM frauds‖ that is a
reflected in the form of ―ATM frauds‖ that is a global global problem. problem. InternetInternet commerce has grown exponentially during the past few years and is still commerce has grown exponentially during the past few years and is still growing. But unfortunately the growth is not on the expected lines because the growing. But unfortunately the growth is not on the expected lines because the credit card fraud which has become common has retarded the e-commerce credit card fraud which has become common has retarded the e-commerce growth. Credit card fraud has become regular on
growth. Credit card fraud has become regular on internet which not only affectsinternet which not only affects card holders but also online merchants.
card holders but also online merchants.
Credit card fraud can be done by taking over the account, skimming or if Credit card fraud can be done by taking over the account, skimming or if the card is stolen. Certain preventive measures can be taken to becoming a the card is stolen. Certain preventive measures can be taken to becoming a
credit card victim. The term "Internet fraud" refers generally to any type of credit card victim. The term "Internet fraud" refers generally to any type of fraud scheme that uses one or more components of the Internet - such as chat fraud scheme that uses one or more components of the Internet - such as chat rooms, e-mail, message boards, or Web sites - to present fraudulent solicitations rooms, e-mail, message boards, or Web sites - to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of f
proceeds of fraud to fraud to financial insinancial institutions titutions or to othor to other connected wer connected with the schemith the scheme.e. Some form of internet form include: spam, scams, identity theft, phishing, Some form of internet form include: spam, scams, identity theft, phishing, spyware, internet banking fraud.
spyware, internet banking fraud.
INTRODUCTION
INTRODUCTION
Cyber crime is like traditional crime; cybercrime can take many shapes Cyber crime is like traditional crime; cybercrime can take many shapes and can occur nearly anytime or anyplace. Criminals committing cybercrime and can occur nearly anytime or anyplace. Criminals committing cybercrime
credit card victim. The term "Internet fraud" refers generally to any type of credit card victim. The term "Internet fraud" refers generally to any type of fraud scheme that uses one or more components of the Internet - such as chat fraud scheme that uses one or more components of the Internet - such as chat rooms, e-mail, message boards, or Web sites - to present fraudulent solicitations rooms, e-mail, message boards, or Web sites - to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of f
proceeds of fraud to fraud to financial insinancial institutions titutions or to othor to other connected wer connected with the schemith the scheme.e. Some form of internet form include: spam, scams, identity theft, phishing, Some form of internet form include: spam, scams, identity theft, phishing, spyware, internet banking fraud.
spyware, internet banking fraud.
INTRODUCTION
INTRODUCTION
Cyber crime is like traditional crime; cybercrime can take many shapes Cyber crime is like traditional crime; cybercrime can take many shapes and can occur nearly anytime or anyplace. Criminals committing cybercrime and can occur nearly anytime or anyplace. Criminals committing cybercrime use a number of methods, depending on their skill-set and their goal. This use a number of methods, depending on their skill-set and their goal. This
should not be surprising: cybercrime is, after all, simply 'crime' with some sort should not be surprising: cybercrime is, after all, simply 'crime' with some sort of 'computer' or ‗cyber‘ aspects.
of 'computer' or ‗cyber‘ aspects.
Cybercrim
Cybercrime has e has surpassed illegal drug trafficking as a surpassed illegal drug trafficking as a criminal moneymcriminal moneymaker.aker. Every 3 seconds an identity is stolen.
Every 3 seconds an identity is stolen.
Without security, your unprotected PC can become infected within four Without security, your unprotected PC can become infected within four minutes of connecting to the internet.
minutes of connecting to the internet.
The usage of internet service in India is
The usage of internet service in India is growing rapidgrowing rapidly. It has given risely. It has given rise to new opportunities in every field we can think of
to new opportunities in every field we can think of – – be it entertainment, be it entertainment, business,
business, sport osport or educationr education..
There are many pros and cons of some new types of technology which There are many pros and cons of some new types of technology which are been invented or discovered. Similarly the new & profound technology i.e. are been invented or discovered. Similarly the new & profound technology i.e. using of
using of INTERNETINTERNET Service, has also got some pros & cons. These cons are Service, has also got some pros & cons. These cons are named CYBER CRIME, the major disadvantage, illegal activity committed on named CYBER CRIME, the major disadvantage, illegal activity committed on the internet by certain individuals because of certain loop-holes. The interest, the internet by certain individuals because of certain loop-holes. The interest, along with its advantages, has also exposed us to security risk that comes with along with its advantages, has also exposed us to security risk that comes with come with connecting to a large network. Computer today are being misused for come with connecting to a large network. Computer today are being misused for
piracy and so on, which invade our privacy and offend our senses. Criminal activities in the cyberspace are on the rise.
Computer crimes are criminal activities, which involve the use of information technology to gain an illegal or an unauthorized access to a computer system with intent of damaging, deleting or altering computer data. Computer crimes also include the activities such as electronic frauds, misuse o f devices, identity theft and data as well as system interference. Computer crimes may not necessarily involve damage to physical property. They rather include them manipulation of confidential data and critical information. Computer crimes involve activities of software theft, wherein the privacy of the users is hampered. These criminal activities involve the breach of human and information privacy, as also the theft and illegal alteration of system critical information. The different types of computer crimes have necessitated the introduc tion and use of ne we r and more effective security measures.
In recent years, the growth and penetration of internet across Asia Pacific has been phenomenal. Today, a large number of rural areas in India and a couple of other nations in the region have increasing access to the internet — particularly broadband. The challenges of information security have also grown
manifold. This widespread nature of cyber crime is beginning to show negative impact on the economic growth opportunities in each of the countries. It is becomi ng imp erative for organizations to take bo th prevent ive and corrective action if their systems are to be protected from any kind of compromise by external malicious element. According to the latest statistics, more than a fifth of the malicious activities in the world originate from the Asia Pacific region. The malicious attacks included denial-of-service attacks, spam and phishing and bot attacks. Overall, spam made up 69% of all monitored e-mail traffic in the Asia pacific region. As per the National Crime Report Bureau statistics, there has been a 255% increase
reported cases. In view of this, various governmental and non-governmental agencies are working towards reducing cyber crime activities.
Computer crime, cyber crime, e-crime, hi-tech crime or electronic crime generally refers to criminal activity where a computer or network is the source, tool, target, or place of a crime. These categories are not exclusive and many activities can be characterized as falling in one more category. According, although the term computer crime and cyber crime are more properly restricted to describing criminal activity in which the comp uter or network is a necessary part of the crime, these terms are also sometimes used to include traditional crimes, such as fraud, theft, blackmail, forgery, and embezzlement, in which computer has grown, computer crime has become more important.
Defining Cyber Crime
Information Technology Act, 2000.
Defining cyber crimes, as ―acts that are punishable by the Information Technology Act" would be unsuitable as the Indian Penal Code also covers many cyber crimes, such as email spoofing and cyber defamation, sending threatening emails etc.
Computer crime has been defined as ―unauthorized use of a computer for personal gain, as in the illegal transfer of funds or to alter the data or property of
others‖ (―Computer Crime‖, 2007).
A generalized definition of cyber crime may be ―unlawful acts wherein the computer is either a tool or target or both‖.
The history of cyber crime
The first recorded cyber crime took place in the year 1820! This is not surprising considering the fact that the abacus, which is thought to be the earliest form of a computer, has been around since 3500 B.C. in India, and China. The era of modern computers, however, began with the ana lyti ca l engine of Charles Babbage.
In 1820, Joseph-Marie Jacquard, a textile manufacturer in France, produced the loom. This device allowed the repetition of a series of steps in the weaving of special fabrics. This result in a fear amongst Jacquard‘s employee that their traditional employment and livelihood were being threatened. They
committed acts of sabotage to discourage Jacquard from Further use of the new committed acts of sabotage to discourage Jacquard from Further use of the new technology. This is the first recorded cyber crime!
technology. This is the first recorded cyber crime!
Today computers have come a long way, with neural networks Today computers have come a long way, with neural networks andnano-computing promising to turn every atom in a glass of water into a computer computing promising to turn every atom in a glass of water into a computer capable of
capable of performperforming a ing a Billion operations per second.Billion operations per second.
Cyber crime is an evil having its origin in the growing dependence on Cyber crime is an evil having its origin in the growing dependence on computer in modern life. In a day and age when everything from computer in modern life. In a day and age when everything from microwave ovens and refrigerators to nuclear power plants is being run on microwave ovens and refrigerators to nuclear power plants is being run on computers, cybercrime has assumed rather sinister implications. Major Cyber computers, cybercrime has assumed rather sinister implications. Major Cyber crimes in the recent past include the Citibank rip off. US $ 10 million were crimes in the recent past include the Citibank rip off. US $ 10 million were fraudulently transferred out of the bank and into a bank account in Switzerland. fraudulently transferred out of the bank and into a bank account in Switzerland. A Russian hacker
A Russian hacker group led by Vladimir Kevin, group led by Vladimir Kevin, a renowned hacker, perpetrateda renowned hacker, perpetrated the attack. The group compromised the bank's security systems. Vladimir was the attack. The group compromised the bank's security systems. Vladimir was allegedly using his office computer at AO Saturn, a computer firm in St allegedly using his office computer at AO Saturn, a computer firm in St Petersburg, Russia, to break into Citibank computers. He
Petersburg, Russia, to break into Citibank computers. He was finallywas finally arr
CYBERCRIME
CYBERCRIMES IN
S IN INDIA
INDIA
As India become the fourth highest number of Internet users in the world, As India become the fourth highest number of Internet users in the world, cyber crimes in India has also increased 50 percent in 2007 over the previous cyber crimes in India has also increased 50 percent in 2007 over the previous year. According to the Information Technology (IT) Act, the majority of year. According to the Information Technology (IT) Act, the majority of offenders were under 30 years of
offenders were under 30 years of age.age.
Around 46% of cyber crimes were related to incident of cyber Around 46% of cyber crimes were related to incident of cyber pornography,
pornography, followed followed by by hacking. hacking. According According to to recent recent published published ‗crime ‗crime inin 2007 report‘ published by the national crime record bureau (NCRB), in over 60 2007 report‘ published by the national crime record bureau (NCRB), in over 60 percent
percent of of cases, cases, offenders offenders were were between between 18 18 and and 30. 30. These These cyber cyber crimes crimes areare publishab
publishable le under under two two categories; categories; the the IT IT Act Act 2000 2000 and and the the Indian Indian Penal Penal CodeCode (IPC). According to the report, 217 cases of cyber crime were registered under (IPC). According to the report, 217 cases of cyber crime were registered under the IT Act in 2007, which is an increase of 50 percent from the previous year. the IT Act in 2007, which is an increase of 50 percent from the previous year. Under the IPC section, 339 cases were recorded in 2007 compared to 311 cases Under the IPC section, 339 cases were recorded in 2007 compared to 311 cases in 2006.Out of 35 mega cities, 17 cities have reported around 300 cases of in 2006.Out of 35 mega cities, 17 cities have reported around 300 cases of cyber-crimes under both categories that is an increase of 32.6 percent in a cyber-crimes under both categories that is an increase of 32.6 percent in a year. The report also shows that cyber crime is not only limited to year. The report also shows that cyber crime is not only limited to metro cities but it also moved to small cities like
metro cities but it also moved to small cities like Bhopal. AccordingBhopal. According to the report, Bhopal, the capital of Madhya Pradesh has reported the highest to the report, Bhopal, the capital of Madhya Pradesh has reported the highest incidence of cyber crimes in the
incidence of cyber crimes in the countrycountry..
In order to tackle with cyber crime, Delhi Police have trained 100 of its In order to tackle with cyber crime, Delhi Police have trained 100 of its officers in handling cyber crime and placed them in its Economic Offences officers in handling cyber crime and placed them in its Economic Offences Wing. These officers were trained for six weeks in computer Wing. These officers were trained for six weeks in computer hardware and software, computer networks comprising data hardware and software, computer networks comprising data communication networks, network protocols, wireless networks and network communication networks, network protocols, wireless networks and network security. Faculty at Guru Go bind Singh Indraprastha University (GGSIPU) was security. Faculty at Guru Go bind Singh Indraprastha University (GGSIPU) was the trainers.
the trainers.
CYBERSPACE
CYBERSPACE
As the cases of cybercrime grow; there is a growing need to prevent As the cases of cybercrime grow; there is a growing need to prevent them. Cyberspace belongs to everyone. There should be electronic surveillance them. Cyberspace belongs to everyone. There should be electronic surveillance which means investigators tracking down hackers often want to monitor a which means investigators tracking down hackers often want to monitor a cracker as he breaks into a victim's computer system. The two basic laws cracker as he breaks into a victim's computer system. The two basic laws governing real-time electronic surveillance in other criminal investigations also governing real-time electronic surveillance in other criminal investigations also apply in this context, search warrants which means that search warrants may be apply in this context, search warrants which means that search warrants may be obtained to gain access to the premises where the cracker is believed to have obtained to gain access to the premises where the cracker is believed to have evidence of the crime. Such evidence would include the computer used to evidence of the crime. Such evidence would include the computer used to commit the crime, as well as the software used to gain unauthorized access and commit the crime, as well as the software used to gain unauthorized access and other evidence of the crime.
other evidence of the crime.
Researchers must explore the problems in greater detail to learn the Researchers must explore the problems in greater detail to learn the origins, methods, and motivations of this growing criminal group. origins, methods, and motivations of this growing criminal group. Decision-makers in business, government, and law enforcement must react to this makers in business, government, and law enforcement must react to this emerging body of knowledge. They must develop policies, methods, and emerging body of knowledge. They must develop policies, methods, and regulations to detect incursions, investigate prosecute the perpetrators, regulations to detect incursions, investigate prosecute the perpetrators, and prevent future crimes. In addition, Police Departments should immediately and prevent future crimes. In addition, Police Departments should immediately take steps to protect their own information systems from intrusions. (Any entry take steps to protect their own information systems from intrusions. (Any entry into an area not previously occupied).
into an area not previously occupied).
Internet provides anonymity: This is one of the reasons why Internet provides anonymity: This is one of the reasons why ccriri mimi nana ls ls trtr y y to to gege t t aawawa y y easeasily ily whewhen cn caugaught ht anand ad alslso go give ive thethem m a cha chancance te too commit the crime again. Therefore, we users should be careful. We should not commit the crime again. Therefore, we users should be careful. We should not disclose any personal information on the internet or use credit cards and if we disclose any personal information on the internet or use credit cards and if we find anything suspicious in e-mails or if the system is hacked, it should be find anything suspicious in e-mails or if the system is hacked, it should be immediately reported to the Police officials who investigate cyber crime rather immediately reported to the Police officials who investigate cyber crime rather than trying to fix the problem by ourselves. Computer crime is a multi- billion than trying to fix the problem by ourselves. Computer crime is a multi- billion dollar problem. Law enforcement must seek ways to keep the drawback from dollar problem. Law enforcement must seek ways to keep the drawback from the great promise of the computer age. Cybercrime is a menace that has to be the great promise of the computer age. Cybercrime is a menace that has to be tackled effectively not only by the official but also by the users by co-operating tackled effectively not only by the official but also by the users by co-operating with the law.
TYPES OF CYBER CRIME
1. Theft of Telecommunications Services
The "phone phreakers" of three decades ago set a precedent for what has become a major criminal industry. By gaining access to organizations can
obtain access to dial-in/dial-out circuits and then market their own calls or sell call time to third parties (Gold 1999). Offenders may gain access to the switchboard by impersonating a technician, by fraudulently obtaining an employee's access code, or by using software available on the internet. Some sophisticated offenders loop between PBX systems to evade detection. Additional forms of service theft include capturing "calling card" details and on-selling calls charged to the calling card account, and counterfeiting or illicit reprogramming of stored value telephone cards.
It has been suggested that as long ago as 1990, security failures at one major telecommunications carrier cost approximately £290 million, and that more recently, up to 5% of total industry turnover has been lost to fraud (Schieck 1995: 2-5). Costs to individual subscribers can also be significant in one case; computer hackers in the United States illegally obtained access to Scotland Yard's telephone network and made £620,000 worth of international calls for which Scotland Yard was responsible (Tendler and Nuttall 1996).
Just as legitimate organisation in the private and public sector rely upon information systems for communication and record keeping, so too are the activities of criminal organisation enhanced by technology.
Just as legitimate organization in the private and public sector rely upon information systems for communication and record keeping, so too are the activities of criminal organizations enhanced by technology.
There is evidence of telecommunications equipment being used to facilitate organized drug trafficking, gambling, prostitution money laundering, child pornography and trade in weapons (in those jurisdictions where such are illegal). The use of encryption technology may place criminal communications beyond the reach of law enforcement.
The use of computer networks to produce and distribute child porno graphy has become the subject of increasing attention. Today, these materials can be imported across national borders at the speed of light. The more overt manifestations of internet child pornography entail a modest degree of organization, as required by the infrastructure of IRC and WWW, but the activity appears largely confined to individuals. By contrast, some of the less publicly visible traffic in child pornography activity appears to entail a greater degree of organization. Although knowledge is confined to that conduct which has been the target of successful police investigation, there appear to have been a number of networks whic h extend cross-nationally, use sophisticated technologies of conc ea lmen t, and entail a significant degree of coordination. Illustra tive of such activity was the Wonderland Club, an international network with members in at least 14 nations ranging from Europe, to North America, to Australia. Access to the group was password protected, and content was encrypted Police investigation of the activity, codenamed ―Operating Cathedral‖
resulted in approximately 100 arrests around the world, and the seizure of over 100,000 images in September, 1998.
3. Telecommunications Piracy
Digital technology permits perfect reproduction and easy dissemination of print, graphics, sound, and multimedia combinations. The temptation to reproduce copyrighted material for personal use, for sale at a lower price, or indeed, for free distribution, has proven irresistable to many.
This has caused considerable concern to owners of copyrighted material. Each year, it has been estimated that losses of between US$15 and US$17 billion are sustained by industry by reason of copyright infringement (United
States, Information Infrastructure Task Force 1995, 131).
The Software Publishers Association has estimated that $7.4 billion worth of software was lost to piracy in 1993 with $2 billion of that being stolen from the Internet (Meyer and Underwood 1994).
Ryan (1998) puts the cost of foreign piracy to American industry at more than $10 billion in 1996, including $1.8 billion in the film industry, $1.2 billion in music, $3.8 billion in business application software, and $690 million in book publishing.
According to the Straits Times (8/11/99) A copy of the most recent James Bond Film The World is Not Enough, was available free on the internet before its official release.
When creators of a work, in whatever medium, are unable to profit from their creations, there can be a chilling effect on creative effort generally, in addition to financial loss.
3. DISSEMINATION OF OFFENSIVE MATERIALS
Content considered by some to be objectionable exists in abundance in cyberspace. This includes, among much else, sexually explicit materials, racist propaganda, and instructions for the fabrication of incendiary and explosive
devices. Telecommunications systems can also be used for harassing, threatening or intrusive communications, from the traditional obscene telephone call to its contemporary manifestation in "cyber-stalking", in which persistent messages are sent to an unwilling recipient.
One man allegedly stole nude photographs of his former girlfriend and her new boyfriend and posted them on the Internet, along with her name, address and telephone number. The unfortunate couple, residents of Kenosha, Wisconsin, received phone calls and e-mails from strangers as far away as Denmark who said they had seen the photos on the Internet. Investigations also revealed that the suspect was maintaining records about the woman's movements and compiling information about her family (Spice and Sink 1999).
In another case a rejected suitor posted invitations on the Internet under the name of a 28-year-old woman, the would-be object of his affections, that said that she had fantasies of rape and gang rape. He then communicated via email with men who replied to the solicitations and gave out personal information about the woman, including her address, phone number, details of her physical appearance and how to bypass her home security system. Strange men turned up at her home on six different occasions and she received many obscene phone calls. While the woman was not physically assaulted, she would not answer the phone, was afraid to leave her home, and lost her job (Miller 1999; Miller and Maharaj 1999).
One former university student in California used email to harass 5 female students in 1998. He bought information on the Internet about the women using a professor's credit card and then sent 100 messages including death threats, graphic sexual descriptions and references to their daily activities. He apparently made the
threats in response to perceived teasing about his appearance (Associated Press 1999a).
Computer networks may also be used in furtherance of extortion. The Sunday Times (London) reported in 1996 that over 40 financial institutions in Britain and the United States had been attacked electronically over the previous three years. In England, financial institutions were reported to have paid significant amounts to sophisticated computer criminals who threatened to wipe out computer systems. (The Sunday Times, June 2, 1996). The article cited four incidents between 1993 and 1995 in which a total of 42.5 million Pounds Sterling were paid by senior executives of the organisations concerned, who were convinced of the
extortionists' capacity to crash their computer systems (Denning 1999 233-4).
5. ELECTRONIC MONEY LAUNDERING AND TAX
EVASION
For some time now, electronic funds transfers have assisted in concealing and in moving the proceeds of crime. Emerging technologies will greatly assist in concealing the origin of ill-gotten gains. Legitimately derived income may also be more easily concealed from taxation authorities. Large financial institutions will no longer be the only ones with the ability to achieve electronic funds transfers transiting numerous jurisdictions at the speed of light. The development of informal banking institutions and parallel banking systems may permit central bank supervision to be bypassed, but can also facilitate the evasion of cash
transaction reporting requirements in those nations which have them. Traditional underground banks, which have flourished in Asian countries for centuries, will enjoy even greater capacity through the use of telecommunications.
With the emergence and proliferation of various technologies of electronic commerce, one can easily envisage how traditional countermeasures against money laundering and tax evasion may soon be of limited value. I may soon be able to sell you a quantity of heroin, in return for an untraceable transfer of stored value to my "smart-card", which I then download anonymously to my account in a financial institution situated in an overseas jurisdiction which protects the privacy of banking clients. I can discreetly draw upon these funds as and when I may require,
downloading them back to my stored value card (Wahlert 1996).
6.
ELECTRONICVANDALISM,
TERRORISM
AND
EXTORTION
As never before, western industrial society is dependent upon complex data processing and telecommunications systems. Damage to, or interference with, any of these systems can lead to catastrophic consequences. Whether motivated by curiosity or vindictiveness electronic intruders cause inconvenience at best, and have the potential for inflicting massive harm (Hundley and Anderson 1995, Schwartau 1994).
While this potential has yet to be realised, a number of individuals and protest groups have hacked the official web pages of various governmental and
commercial organisations (Rathmell 1997). http://www.2600.com/hacked_pages/ (visited 4 January 2000). This may also operate in reverse: early in 1999 an organised hacking incident was apparently directed at a server which hosted the Internet domain for East Timor, which at the time was seeking its independence from Indonesia (Creed 1999).
Defence planners around the world are investing substantially in information warfare-- means of disrupting the information technology infrastructure of defence systems (Stix 1995). Attempts were made to disrupt the computer systems of the Sri Lankan Government (Associated Press 1998), and of the North Atlantic Treaty Organization during the 1999 bombing of Belgrade (BBC 1999). One case, which illustrates the transnational reach of extortionists, involved a number of German hackers who compromised the system of an Internet service provider in South Florida, disabling eight of the ISPs ten servers. The offenders obtained personal information and credit card details of 10,000 subscribers, and, communicating via electronic mail through one of the compromised accounts, demanded that US$30,000 be delivered to a mail drop in Germany. Co-operation between US and German authorities resulted in the arrest of the extortionists (Bauer 1998).
More recently, an extortionist in Eastern Europe obtained the credit card details of customers of a North American based on-line music retailer, and published some on the Internet when the retailer refused to comply with his
demands (Mark off 2000).
7. SALES AND INVESTMENT FRAUD
As electronic commerce becomes more prevalent, the application of digital technology to fraudulent endeavours will be that much greater. The use of the telephone for fraudulent sales pitches, deceptive charitable solicitations, or bogus investment overtures is increasingly common. Cyberspace now abounds with a wide variety of investment opportunities, from traditional securities such as stocks
and bonds, to more exotic opportunities such as coconut farming, the sale and leaseback of automatic teller machines, and worldwide telephone lotteries (Cella and Stark 1997 837-844). Indeed, the digital age has been accompanied by unprecedented opportunities for misinformation. Fraudsters now enjoy direct access to millions of prospective victims around the world, instantaneously and at minimal cost.
Classic pyramid schemes and "Exciting, Low-Risk Investment Opportunities" are not uncommon. The technology of the World Wide Web is ideally suited to investment solicitations. In the words of two SEC staff "At very little cost, and from the privacy of a basement office or living room, the fraudster can produce a home page that looks better and more sophisticated than that of a Fortune 500 company" (Cella and Stark 1997, 822).
8. ILLEGAL INTERCEPTION OF TELECOMMUNICATIONS
Developments in telecommunications provide new opportunities for electronic eavesdropping. From activities as time-honoured as surveillance of an unfaithful spouse, to the newest forms of political and industrial espionage, telecommunications interception has increasing applications. Here again, technological developments create new vulnerabilities. The electromagnetic signals emitted by a computer may themselves be intercepted. Cables may act as broadcast antennas. Existing law does not prevent the remote monitoring of computer radiation.
It has been reported that the notorious American hacker Kevin Poulsen was able to gain access to law enforcement and national security wiretap data prior to his arrest in 1991 (Littman 1997). In 1995, hackers employed by a criminal organisation attacked the communications system of the Amsterdam Police. The hackers succeeded in gaining police operational intelligence, and in disrupting police communications (Rathmell 1997).
9. ELECTRONIC FUNDS TRANSFER FRAUD
Electronic funds transfer systems have begun to proliferate, and so has the risk that such transactions may be intercepted and diverted. Valid credit card numbers can be intercepted electronically, as well as physically; the digital information stored on a card can be counterfeited.
Of course, we don't need Willie Sutton to remind us that banks are where they keep the money. In 1994, a Russian hacker Vladimir Levin, operating from St Petersburg, accessed the computers of Citibank's central wire transfer department, and transferred funds from large corporate accounts to other accounts which had been opened by his accomplices in The United States, the Netherlands, Finland, Germany, and Israel. Officials from one of the corporate victims, located in Argentina, notified the bank, and the suspect accounts, located in San Francisco, were frozen. The accomplice was arrested. Another accomplice was caught attempting to withdraw funds from an account in Rotterdam. Although Russian law precluded Levin's extradition, he was arrested during a visit to the United States and subsequently imprisoned (Denning 1999, 55).
Other types of cyber crime
Hacker is a term used by some to mean "a clever programmer" and by others, especially those in popular media, to mean "someone who tries to break into computer systems."
1) Eric Raymond, compiler of The New Hacker's Dictionary, defines a hacker as a clever programmer. A "good hack" is a clever solution to a programming problem and "hacking" is the act of doing it. Raymond lists five possible characteristics that qualify one as a hacker, which we paraphrase here:
A person who enjoys learning details of a programming language or system A person who enjoys actually doing the programming rather than just theorizing about it
A person capable of appreciating someone else's hacking A person who picks up programming quickly
A person who is an expert at a particular programming language or system, as in "UNIX hacker"
2) The term hacker is used in popular media to describe someone who attempts to break into computer systems. Typically, this kind of hacker would be a proficient programmer or engineer with sufficient technical knowledge to understand the weak points in a security system.
Motive Behind The Crime
a. Greed b. Power c. Publicity d. Revenge e. Adventuref. Desire to access forbidden information g. Destructive mindset
h. Wants to sell n/w security services
Theft:
This crime occurs when a person violates copyrights and downloads music, movies, games and software. There are even peer sharing websites which encourage software piracy and many of these websites are now being targeted by the FBI. Today, the justice system is addressing this cyber crime and there
Cyber Stalking:
This is a kind of online harassment wherein the victim is subjected to a barrage of online messages and emails. Typically, these stalkers know their
victims and instead of resorting to offline stalking, they use the Internet to stalk. However, if they notice that cyber stalking is not having the desired effect, they begin offline stalking along with cyber stalking to make the victims‘ lives more
miserable.
Identity Theft:
This has become a major problem with people using the Internet for cash transactions and banking services. In this cyber crime, a criminal accesses data about a person‘s bank account, credit cards, Social Security, debit card and other sensitive information to siphon money or to buy things online in the victim‘s name. It can result in major financial losses for the victim and even spoil the victim‘s credit history.
Malicious Software:
These are Internet-based software or programs that are used to disrupt a network. The software is used to gain access to a system to steal sensitive information or data or causing damage to software present in the system.
This is also a type of cyber crime wherein criminals solicit minors via chat rooms for the purpose of child pornography. The FBI has been spending a lot of time monitoring chat rooms frequented by children with the hopes of reducing and preventing child abuse and soliciting.
CLASSIFICATION
OF
CYBER
CRIME
1)Against Individuals:
(i)Email spoofing:
A spoofed email is one in which e-mail header is forged so that mail appears to originate from one source but actually has been sent from another source.
(ii) Spamming:
Spamming means sending multiple copies of unsolicited mails or mass e-mails such as chain letters.
(ii)Cyber Defamation:
This occurs when defamation takes place with the help of computers and / or the Internet. E.g. someone publishes defamatory matter about someone on a website or sends e-mails containing defamatory information.
(iv)Harassment & Cyber Stalking:
classification of cyber crime 1.Cyber crime against Individual 2.Cyber crime Against Property 3.Cyber crime Against Organization 4.Cyber crime Against Society
Cyber Stalking Means following the moves of an individual's activity over internet. It can be done with the help of many protocols available such at e-mail, chat rooms, user net groups.
(2) Against Property:
(i) Credit Card Fraud:
(
ii) Intellectual Property crimes:
These include Software piracy: illegal copying of programs, distribution of copies of software.
Copyright infringement
Trademarks violations
Theft of computer source code
(iii) Internet time theft:
the usage of the Internet hours by an unauthorized person which is actually paid by another person.(3) Against Organisation
(i) Unauthorized Accessing of Computer:
Accessing the computer/network without permission from the owner. It can be of 2 forms:
a) Changing/deleting data:
Unauthorized changing of data.
b) Computer voyeur:
The criminal reads or copies confidential or proprietary information but the data is neither deleted nor changed.
When Internet server is flooded with continuous bogus requests so as to denying legitimate users to use the server or to crash the server.
(iii)Computer Contamination/ Virus Attack:
A computer virus is a computer program that can infect other computer programs by modifying them in such a way as to include a (possibly evolved) copy of it. Viruses can be file infecting or affecting boot sector of the computer. Worms, unlike viruses do not need the host to attach themselves to.
(iv) E-mail Bombing:
Sending large numbers of mails to the individual or company or mail servers thereby ultimately resulting into crashing.
(v)Salami Attack:
When negligible amounts are removed & accumulated in to something larger. These attacks are used for the commission of financial crimes.
(vi)Logic Bomb:
It‘s an event dependent programme, as soon as the designated event occurs, it crashes the computer, release a virus or any other harmful possibilities.
(vii) Trojan Horse:
An unauthorized program which functions from inside what seems to be an authorized program, thereby concealing what it is actually doing.
(viii) Data diddling:
This kind of an attack involves altering raw data just before it is processed by a computer and then changing it back after the processing is
completed.
(4) Against Society
(i) Forgery:
Currency notes, revenue stamps, mark sheets etc can be forged using computers and high quality scanners and printers.
(ii) Cyber Terrorism:
Use of computer resources to intimidate or coerce others.
(iii) Web Jacking:
Hackers gain access and control over the website of another, even they change the content of website for fulfilling political objective or for money.
REASONS FOR CYBER CRIME
Hart in his work ―The Concept of Law‖ has said ‗human beings are vulnerable so rule of law is required to protect them‘. Applying this to the cyberspace we may say that computer are vuln erable (c apable of attack) so rule of law is required to protect and safeguard them against cyber cri me . Th e reasons for the vulnerability of computers may be said to be:
1. Capacity To Store Data In Comparatively Small
Space-The computer has unique characteristic of storing data in a very small space. This affords to remove or derive information either through physical or virtual medium makes it much easier.
2 . Eassy To Access
The problem encountered in guarding a computer system from unauthorized access is that there is every possibility of breach not due to human error but due to the complex technology. By secretly implanted logic bomb, key loggers that can steal access codes, advanced voice recorders; retina imagers etc. That can fool biometric systems and bypass firewalls can be utilized t o get past man y a security system.
3. Coplex
The computers work on operating systems and these operating systems in turn are composed of millio ns o f c odes. Human mind is falli ble and it is no t possible that there mi ght not be a lapse at any stage. The cyber criminals
take advantage of these lacunas and penetrate into the computer system.
4. Negligence
Neglige nce is very closely connected wi th huma n cond uct. It is therefore very probable that while protecting the computer system
there might be any negligence, which in turn prov ide s a cyb er criminal to gain access and control over the computer system.
5. Loss of evidence
Loss of evidence is a very common & obvious problem as all the data are routinely destroyed. Further collection of data outside the territorial extent also paralyses this system of crime investigation.
BANKING SECTOR
The Banking Industry was once a simple and reliable business that took deposits from investors at a lower interest rate and loaded it out to borrowing at a higher rate.
However deregulation and technology led to a revolution in the Banking Industry that saw it transformed. Banks have become global industrial powerhouses that have created ever mo re complex produ cts that use risk. Through technology development, banking services have become available 24 hours a da y, 365 days a week, through ATMs, at online banking, and in electronically enabled exchanges where everything from stocks to currency futures contracts can be traded. The Banking Industry at its core provides access to credit. In the lenders case, includes access to their own savings and investments, and interest payments on those amounts. In the case of borrowers, it includes access to loans for the creditworthy, at a competitive interest rate. Ba nking servic es incl ude transactional services, such as verification of account details, account balance details and the transfer of funds, as well as advisory services that help individuals and institutions to properly plan and manage their finances. Online banking channels have become a key in the last 10 years.
The collapse of the Banking Industry in the Financial Crisis, however, means that some of the more extreme risk-taking and complex securitization activities that banks increasingly engaged in since 2000
will be limited and carefully watched, to ensure that there is not another banking system meltdown in the future.
Banking in India originated in the last decades of the 18th century. The oldest bank inexistence in India is the State Bank of India , a govern ment -owne d ba nk t hat trac es its origin s back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the Imperial Bank of India, regarding it to commercial banking functions. After India independent in 1947, the Reserve Bank was n ationalized and give n broader po wers. In 1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980.
Currently, India has 88 scheduled commercial banks (SCBs) -27 public sector banks (that is with the Government of India h o l d i n g a s t a k e ) , 3 1 p r i v a t e b a n k s ( t h e s e d o n o t h a v e government stake; they may be publicly listed and traded on stock exchanges) and 38 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5%respectively.
CREDIT CARDS FRAUDS
INTRODUCTION TO CREDIT CARDS
Credit was first used in Assyria, Babylon and Egypt 3000 years ago. The bill of exchange- the forerunner of banknotes - was established in the 14th century. Debts were settled by one-third cash and two-thirds bill of exchange. Paper money followed only in the 17th century. The first
advertisement for credit was placed in 1730 by Christopher Thornton, who offered furniture that could be paid off weekly.
From the 18th century until the early part of the 20th, tallymen sold clothes in return for small weekly payments. They were called "tallymen" because they kept a record or tally of what people had bought on a wooden stick. One side of the stick was marked with notches it represent the amount of debt and the other side was a record of payments. In the 1920‘s, a shopper‘s plate - a "buy now, pay later" sys tem - was introdu ced in the USA. It
could only be used in the shops which issued it. In 1950, Diners Club and American Express launched their charge cards in the USA, the first "plastic money".
In 1951, Diners Club issued the first credit card to 200 customers who could use it at 27 restaurants in New York. But it was only until the establishment of standards for the magnetic strip in 1970 that the credit card became part of the information age .The first use of magnetic stripes on cards was in the early 1960's, when the London Transit Authority installed a magnetic stripe system. San Francisco Bay Area Rapid Transit installed a paper based ticket the same size as the credit cards in the late 1960's. The word credit comes from Latin, meaning ―TRUST‖.
IF CARD IS STOLEN
When a credit card is lost or stolen, it remains usable until the h ol de r no ti fi es th e b an k t h a t t h e c a r d i s l o s t ; m o s t b a n k s h a v e t o l l - f r e e t e l e p h o n e n u m b e r s w i t h 2 4 - h o u r s u p p o r t t o encourage prompt reporting. Still, it is possible for a thief to make unauthorized purchases on that card up until the card is cancelled. In the abse nce of othe r s ecu rity mea sure s, a t hief coul d potentially purchase thousands of dollars in merchandise or services before the card holder
In the United States, federal law limits the liability of card holders to $50 in the event of theft, regardless of the amount charged on the card; in practice, many banks will waive even this small payment and simply remove the fraudulent charges from the customer's account if the customer signs an affidavit confirming that the charges a re indeed fraudulent. Other countries generally have similar laws aimed at protecting consumers from physical theft of the card
The only common security measure on all cards is a signature panel, but signatures are relatively easy to fo rge. Many me rchants will dema nd to see a pict ure ID, such as a drive r's license, to verify the identity of the purchaser, and some credit cards include the holder's picture on the card itself. However, the card holder has a right to refuse to show additional verification, and asking for such verification may be a violation of the merc hant 's agre eme nt with the cred it card companies.
Self-serve payment systems (gas stations, kiosks, etc.) are common targets for stolen cards, as there is no way to verify the card holder's identity. A common countermeasure is to require the user to key in some identifying information, such as the user's ZIP or postal code. This method may deter casual theft of a card found alone, but if the card holder's wallet is stolen, it may be trivial for the thief to deduce the information by looking at other items in the wallet. For instance, a U.S. driver license commonly has the holder's home address and ZIP code printed on it.
Banks have a number of countermeasures at the network level, including sophisticated real-time analysis that can estimate the proba bility of fraud based on a nu mb er of factors. For examp le, a large transaction occurring a great distance from the card holder's h o m e m i g h t b e f l a g g e d a s s u s p i c i o u s . T h e m e r c h a n t m a y b e
i n s t r u c t e d t o c a l l t h e b a n k f o r v e r i f i c a t i o n , t o decline the transaction, or even to hold the card and refuse to return it to the customer.
Stolen cards can be reported quickly by card holders, but a compromised account can be hoarded by a thief for weeks or months before any fraudulent use, making it difficult to identify the source of the compromise. The card holder may not discover fraudulent use until receiving a billing statement, which may be delivered infrequently.
Compr omised Accounts
Card account information is stored in a number of formats. Account numbers are embossed or imprinted on the card a magnetic stripe on the contains the data in machine readable format. Fields can vary, but the most common include:
Name of card holder
Account number
Expiration date
Many Web sites have been compromised in the past and theft of c r e d i t c a r d d a t a i s a m a j o r c o n c e r n f o r b a n k s . D a t a o b t a i n e d i n a th ef t, li ke ad dr es se s or ph on e nu mbe rs , ca n be highly useful to a thief as additional card holder verification.
Mail/Internet Order Fraud
The mail and the Internet are major routes for fraud against merchants who sell and ship products, as well Internet merchants who provide online services. The industry term for catalog o r d e r a n d s i m i l a r t r a n s a c t i o ns i s " C a r d N o t P r e s e n t " ( C N P ) , m e a n i n g t h a t t h e c a r d i s n o t p h y s i c a l l y a v a i l a b l e f o r t h e m e r c h a n t t o i n s p e c t . T h e m e r c h a n t m u s t r e l y o n t h e h o l d e r
on the card by indirect means, whether by mail, telephone or over the Internet when the cardholder is not present at the point of sale
.It is difficult for a merchant to verify that the actual card holder is indeed authorizing the purchase. Shipping companies can guarantee delivery to a location, but they are not required to check identification and they a r e u s u a l l y a r e n o t i n v o l v e d i n p r o c e s s i n g p a y m e n t s f o r t h e merchandise. A common preventive measure for merchants is to allow shipment only to an address approved by the cardholder, and merc hant ban king syst ems offe r simpl e metho ds of verifying this information.
Additionally, smaller transactions generally undergo less scrutiny, and are less likely to be investigated by either the bank or the merchant, since the cost of research and prosecution usually far outweighs the loss due to fraud. CNP merchants must take extra precaution against f r a u d e x p o s u r e a n d a s s o c i a t e d l o s s e s , a n d t h e y p a y h i g h e r r a t e s t o me r c h a n t b a n k s f o r t h e privilege of accepting cards. Anonymous scam artists bet on the fact that many fraud prevention features do not apply in this environment.
Merchant associations have developed some prevention measures, such as single use card numbers, but these have not met with much success. Customers expect to be able to use their credit card without any hassles, and have little incentive to pursue additional security due to laws limiting customer liability in the event of fraud. Merchants can implement these prevention measures but risk losing business if the customer chooses not to use the measures
Account Takeover
There are two types of fraud within the identity theft category: 1. Application Fraud.
1. Application Fraud.
Application fraud occurs when criminals use stolen or fake documents to open an account in someone else‘s name. Criminal may try to steal documents such as utility bills and bank statements to build up useful personal information.
2. Account Takeover.
Account takeover involves a criminal trying to take over another person‘s account, first by gathering information about the intended victim, then contacting their bank or credit issuer- ma sque radi ng as th e genuine cardholder-asking for mail to be redirected to a new address. The criminal then reports the card lost and asks for a repla ce men t to be sent. The rep lac eme nt card is then used fraudulently.
CYBER CRIME IN BANKING SECTOR
AUTOMATED TELLER MACHINE
managed by the ―barter system‖. The use of monetary instruments as a unit of exchange replaced the barter system and money in various denominations was used as the sole purchasing power. The modern contemporary era has replace these traditional monetary instruments from a paper and mental based currency to ―plastic money‖ in the form of credit cards, debit cards, etc. This has resulted in the increasing use of ATM all over the world. The use of ATM is not only safe but is also convenient. This safety and convenience, unfortunately, has an evil side as well that do not originate from the use of plastic money rather by misuse of the same. This evil side is reflected in the form of “ATM FRAUDS”that is a global
problem. The use of plastic money is increasing day by day for payment of shopping bills, electricity bills, school fees, phone bills, insurance premi um, travelling bills and even petrol bills. The convenience and safety
that credit cards carry with its use has been instrumental in increasing both cre dit card vo lume s and usage . Thi s grow th is not only in positive use of the same but as well as the negative use of the same. The world at large is struggling to increase the convenience and safety on the one hand and to reduce it misuse on the other.
WAYS TO CARD FRAUDS
Some of the popular techniques used to carry out ATM crime are:
1. Thought card Jamming ATM‘s card reader is tampered with in order to trap a customer‘s card. Later on the criminal removes the card.
2. Card Skimming, is the illegal way of stealing the card‘s security information from the card‘s magnetic stripe.
3. Card Swapping, through this customer‘s card is swapped for another ca rd without the knowledge of cardholder.
4. Website Spoofing, here a new fictitious site is made which looks au thenti c to the user and customers are asked to give their card number. PIN and other information, which are used to reproduce the card for use at an ATM.
Be aware of other around you. If someone close by the cash machine is behaving suspiciously or make you feel uncomfortable, choose another. Make
sure you check the machine before you use it for any signs of tampering. Examine the machine for stick on boxes, stick on card entry slots etc. If you find it difficult to get your card into the slot, do not use it, go to another machine.
If there is anything unusua l about the cash machi ne repor t it to the bank and police or the owner of the premises immediately. Under no circumstances should members of the public attempt to remove a device as it‘s possible the offender may be nearby.
What Precaution Should Be Taken While
Leaving Cash Machine
Once you have completed a transaction, discreetly put your money and card away before leaving the cash machine. If you lose your card in cash machine, cancel the card immediately with the card issuer‘s 24-hour emergency line, which can be found on your last bank statement. Do not assume that your bank automatically knows that the machine has withheld your card. Again, beware of help offered by "well meaning strangers". Dispose of your cash machine receipt, mini-statement or balance enquiry slip with care. Tear up or preferably shred these items before discarding them.
Card Fraud Also Happens In The Home:
Cardholder should also be warned of the risks of verifying bank details at home in unsolicited telephone conversations. Always call the person back using the advertised customer telephone number, not the telephone number they may give you.
1.D o N o t C l i c k O n H y p e r l i n k s S e n t T o Y o u B y E m a i l A s k i n g Y o u T o Confirm Your Bank Details Online:
Hyperlinks are links to web pages that have been sent to you by email and may open a dummy website designed to steal your pers onal details. Ph one your ba nk instead on their ma in customer
number or access your account using the bank's main website address. Use good antivirus and firewall protection.
NEVER Write Down Your Pin:
People make life very easy for pickpockets if they write down their PIN and keep it in their purse or wallet. Do not write down your PIN. If you have been given a number that you find difficult to remember, take your card along to a cash machine and change the number to one that you will be able to remember without writing it down.
PREVENTION FOR ATM CARDS
Most ATM fraud happens due to the negligence of customers in using, and more importantly, negligence of banks in educating their customers about the matters that should be taken care of while at an ATM. The number of fraud in India is more in regard to negligence of the Personal Identification Numbe r (P IN ), than by sophi sticated cri mes like skimming. Banks need
to develop a fraud policy – the policy should be written and distributed to all employees, borrowers and depositors. The most important aspect for reducing ATM related fraud is to educate the customer. Here is a compiled list of guidelines to help your customer from being an ATM fraud victim:
1. Look for suspicious attachment. Criminals often capture information through ATM skimming – using devices that steal magnetic strip information. At a
glance, the skimmer looks just like a regular ATM slot, but it‘s an attachment that captures ATM card number. To spot one, the attachment slightly protrud es from the ma chine and ma y not be parallel wi th the inherent grooves. Sometimes, the equipment will even cut off the printed labels on the ATM. The skimmer will not obtain PIN numbers, however. To get that, fraudsters place hi dden cameras facing the ATM screen. There‗s also the helpful bystander (the criminal) who may be standing by to kindly inform you the machine has had problems and offer to help. If you do not feel safe at any time, press the ATM cancel button, remove your card and leave the area immediately.
2. Minimize your time at the ATM. The more time you spend at the ATM, the more vulnerable you are. If you need to update your records after a transaction, one is advised do it at home or office, but not while at the ATM. Even when depositing a cheque at the ATM, on should not make/sign the cheque at the ATM. After the transaction, if you think you are being followed, go to an area with a lot of people and call the police.
3. Mark smart deposits. Some ATMs allow you to directly deposit checks and cash into your accounts without stuffing envelopes. As for the envelope-based deposit, make sure they go through- if it gets jammed and it doesn‘t fully go into the machine, the next person can walk up and it out. After having made the ATM deposit, compare your record with the account statements or online banking records.
INDIAN SCENARIO
In India, where total number of installed ATM‘s base is far less than many developed countries. ATM-related frauds are very less. But they could increase as more and more ATM‘s will penetrate in the country, the bank should create awareness among customers about the card-related frauds to reduce the number of frauds in future. In India, Indian Banks Association (IBA)can take lead to kick started.
The ATM fraud is not the sole problem of banks alone. It is a big threat and it requires a coordinated and cooperative action on the part of the bank , customers and the law enfor ceme nt ma chinery. The ATM
frauds not only cause financial loss to banks but they also undermine customers‘ confidence in the use of ATMs. This would deter a greater use of ATM for monetary transactions. It is therefore in the interest of banks to prevent ATM frauds. There is thus a need to take precautionary and insurance measures that gives greater ―protection‖ to the ATMs, particularly those located in less secure areas. The nature and the extent of measures to be adopted will, however, depend upon the requirements of the respective banks.
CYBER MONEY LAUNDERING
During the past two decades, IT and Internet technologies have reached every nook and corner of the world. E-commerce has come into existence due to the attributes of Internet like ease of use, speed, anonymity and its International nature. Internet has converted the world into a boundary less market place that never sleeps. Drug peddlers and organized criminals found a natural and much sought after ally in Inter net. Comput er netwo rks and Inter ne t, in part icula r, permit transfer of funds electronically between trading partners, businesses and consumers. This transfer can be done in many ways. They include use of credit cards, Internet banking, e-cash, e-wallet etc. for exa mple, sma rt cards like Visa Cash, Mondex card, whose use is growing can store billions of dollars.
At present, there is an upper limit imposed by the card issuers but technically there is no limit. In some other form of computer-based
e-money, there is no upper limit. Mobile banking and mobile commerce are growing and these technologies have the capability to transfer any amount of money at the touch of a bottom or click of a mouse. They can be effective tool in the hands of money launderers. First and foremost, the anonymity offered by internet and cyber payment system is exploited to the hilt by the criminal elements.
As cyber payment systems eliminate the need for face to face interactions, transfer of funds can be done between two trading partners directly. Two individuals also can transfer funds directly using e- wallets. This
problem is further compounded by the fact that, in many countries, non-financial institutions are also permitted to issue e-money. Monitoring the activities of these institutions in a traditional manner is not possible. Earlier, cross-border transactions were controlled by the central banks of respective countries. With the entry of Internet commerce, the juri sd ict ional technicalities come into play and it is another area that is being exploited by the money launderers. The capacity to transfer unlimited amounts of money without having to go through strict checks makes cyber money laundering an attractive proposition. From the point of view of law enforcing agencies, all the above advantages cyber payments provide to consumers and trading partners, turn out to be great disadvantages while investigating the crimes.
