Computer Crime Problems Research Center

Andrei Belousov


Plastic Payment Means Crimes: their Classification  and  Characteristic


Nowadays Ukraine traces through the tendency of  increasing the damage caused by  crimes in the sphere of  bank technologies. According to the statistics for the period of 2000 –2001  77% of the whole damage  caused by  economic crimes has the direct bearing on  commercial banks’ activity.  Only in the sphere of credit bank activity the level of  swindle in Ukraine exceeds 4-5-fold the average level in the world (most of them fall only on Kiev and account for 80 %). The crimes committed by  the use of plastic payment means can be placed among the most dangerous economic crimes, for they make a negative impact not only on a bank’s activity but on the other subjects of economic sphere as well. Such  kind of crimes imply the crimes including the corpus delicti stipulated by  the Criminal Code of Ukraine in  Articles 190, 200, 361 [1].

Appearing  of  the plastic payment cards  in the system of clearing settlement  has produced  a new kind of crimes. High-grade market of plastic payment cards in Ukraine has not developed yet, but the situation is definitely to be inclined to  it. So it is at least thoughtless to underrate danger of the crimes and abuse in the system of clearing settlement .

The financial and legal security of banks and their customers and its development as well are impossible to be considered out of touch with the methods  of illegal operations with plastic payment cards. They single out 9 main types of crime among these operations:

1.       Operations with counterfeit cards.

2.       Operations  with  stolen or lost cards.

3.       Multiple payment for services and goods  .

4.       Fraud  with post and telephone orders.

5.       Multiple  withdrawing a bank account.

6.       The swindle with counterfeit slips.

7.       Fraudulent use of  cash dispensers while serving out cash.

8.       Connecting up an electronic recording device to   a POS-terminal or  cash dispensers (“Skimming”).

9.       Other kinds of swindle.

 Each of the means mentioned above calls for special characteristic.

1.Operations with counterfeit cards. The most part of losses in the  payment system falls on this type of swindle. Considering high technical and technological protectability of real payment cards the counterfeit cards have been rarely used recently and they can be determined by means of  simplest diagnostics. As a rule, to forge a  card  they use  stolen intermediates of cards where  essential elements of  a bank and a customer are applied.  Having up-to-date  equipment  criminals  can apply some information even to a magnetic stripe of a card or copy it in other words   perform counterfeits  on a high level.

            Swindle  with counterfeit cards is characterised by  partial  or  entire   counterfeit  of payment cards.  Modified original  cards are meant  to be the  cards made at the factories which have  a proper permit,  but these cards  contain quite different information about the card owner from  the information  in the original card. Partial  plastic counterfeit cards   are performed  on the bases of using the original card.

            The mechanism of swindle may be various:  a swindler legally receives a usual card at a bank, deposits a minimally required sum  on a special card account. Before or after that he procures the information about  the owner of a plastic payment card of the very company, but  with more considerable  sum   and  inserts new data in his card. To commit this type of swindle the criminal  must  pick up   some information  about code numbers,  a surname,  a name patronymic name, an authorised  signature, etc.

            There are various ways of  fulfilling such  kind of swindle:

·         changing the information on a magnetic medium;

·         changing the information  extruded on the outer face;

·         using both above mentioned means;

·         forging the signature of legal owner of the card.

When forging a signature several  variants are used, but it is taken into consideration that  the authorised signature  is impossible to delete,  for  on making an attempt  to do this  the word  VOID – “invalid” will appear in the signature  field. So it is often painted over white. The signature field happens to be changed into  new one using  an adhesive stripe of paper [2].

To apply the obtained information about the owner to a magnetic stripe  even earlier was not a big problem  from the technical point of view.  The data were simply input  on the  principle of  tape recording  in  an appropriate  format. When they began to protect the issuers  by means of coding the record, skimming appeared that is thorough and entire  coping  the whole content of magnetic tracks.

Holograms and  emblems produced on the technology of  gitter  are not  effective protection  as during  a routine process of  identification they are usually paid less attention to  than signatures and other personal essential elements. The information  extruded on the outer face  can be changed in different ways.

Letters and figures extruded on the card surface can be cut out by criminals and changed into others by means of  glue. Thus absolutely new name and surname appear on the card.

One of the most dangerous means of  plastic  cards  counterfeit is production of entirely false cards. The method of entire coping  has been widely-spread in some East-European countries. Such means  is often used by  organised criminal groups where, as a rule,  workers of restaurants or other service offices involved. The  latter are used for gaining the information about credit cards which fall into  their hands when having restaurant bills or other  services paid as it has been mentioned before, when the card  falls out of touch with the customer for a while. And when it is returned back, its “twin” card is left at criminals.

There is one more  dangerous method – the method of “white plastic card” (WPC) – which can be related to this type.  Counterfeit of  a plastic card   demands an expensive  technology, for the amount of outer protection  levels of original cards  (thin line figures, guilloched layer, holograms, photographs, ultraviolet pictures) are more and more increasing from year to year. WPC imply the use of  a piece of clean  plastic in the form of a usual card where real data (the number of a real account, the period of validity, a surname, etc.) are applied to.

Then the card is used by  an owner of a service office  who is also involved in the criminal group. The shop owner  fulfils a fictitious turnover, send to the issuer bills to pay, and shares the profit  with his accomplices.

Having picked up a PIN-code , “white cards” may be used  to commit  misappropriations by drawing out    cash through dispensers which don’t  compare and don’t check  a signature, a photo and other attributes of a card.

Credit  card information  used to make plastic counterfeit cards   may be collected  in different countries. Information from the USA, European countries and from the Asian region as well are used more often. Criminal groups working in different regions exchange such information.

2.Operations  with  stolen or lost cards.   Swindle use of stolen cards is still the most  widely-spread crime.  The methods of  counteraction to thefts and swindle use of plastic payment cards have been perfected for years but at present  companies prefer to produce cheap cards to cut down possible losses  caused by  their illegal use. When the sums of losses  abruptly  increase, companies undertake urgent measures to introduce new safeguards.

To cause   large damage on a stolen card is possible in case the swindler  knows PIN-code of a customer.  Then it is possible  to pay out a large sum   from the customer’s account through the net of electronic  cash dispensers before the  bank-issuer of a stolen card  manages to insert it into the electronic stop-list ( the list of invalid cards).

 The  given method is characterised by  capturing the plastic payment card  as a result of a its theft from  an owner by means of  burglary, theft in the transport or other places, and  also as a result of  owner's losing s card after he has acquired and signed it at a bank .

The peculiarity of  swindle in case a card is stolen when being  sent by post is that the owner does not know about  the loss of the card, he does not  suspect that he has his card stolen.  It quite difficult to prevent  theft in this case. Such means has not spread in Ukraine yet. The matter is that  in the USA, for example,  when changing a residence the owner of a credit card can turn to the company-issuer with the letter of inquiry to get the copy of his card to a new address.

   A malefactor  fabricates  a letter of advice  about the credit card owner's  changing a residence, and  send  the card to him by post. The stolen card in this way may be used by the thief himself or  he can sell it to another malefactor. It is one more means of penetrating  the stolen credit cards into a country.

Letter-boxes in apartment houses  are favourite  objects for credit card hunters. Criminals are often  informed about the time of new credit card  delivery. Following the post-man the theft waits for the former to drop the correspondence into the mail-box and leave, then he  takes out the content. Investigators  call this type of  theft  “ a slow  passer-by”.

Many organisations producing  cards use registered letters for delivery because of  considerable  losses caused by  post theft. A preliminary letter of advice about forthcoming of a card delivery may be used as an additional  preventive measure. Sometimes such preliminary letter of advice  may combine with the system of  so-called “double dating”. In this case the card becomes valid a month later after  the delivery date. In case  the card is not received  this period of time is sufficient to inform  about  its  loss and  enter the card in the stop-list.  Some organisations producing cards demand  the receiver to necessarily inform  them  about his having the card delivered.

If the member of a criminal group  has the chance to introduce himself into the post office, he gets unique opportunities to steal the cards sent by post, which he  then delivers to his  accomplices. Thus, perfecting the ways of correspondence delivery combined with  higher measures of  mail protection contributes to decreasing the plastic card  thefts.

According to international experts’ estimations the most powerful mafia specializing  in plastic business include natives of Nigeria. According to the information of Interpall there are at least five large centres on  training the professional  swindlers. Having learned the ways of swindle the  “graduates” of these schools   are  sent  to European countries.  They are met here, taken on the staff, as a rule, for a job of a cleaner in big companies. The task is quite  definite that is to  collect information about  a certain person owning a considerable fortune.

Companies producing cards usually have  non-stop service to be informed  about  the loss of  cards.  When receiving the message  the customer’s account is blockaded and any further use of the card  will cause  carrying out the investigation.  Sometimes the unusual number of transactions  may result in stirring up the computer system signalling before  it is known about the theft of a card. We have carried out the research and come to the conclusion that  messages about card loss  may  be received  by the company  even 3-4 days after  its disappearing, and in case of  using the counterfeit card    the swindle may be revealed even 30-40 days later [3].

Companies regularly publish bulletins  listing  the card numbers to be  withdrawn  and send so-called stop-lists  to the sellers.  Some shops have  special   machines (point of sale) -  computer terminals enabling  to check the  state of  a client’s account before concluding a bargain. However, the possibility of fulfilling  the method under consideration is  connected with the fact that  law-enforcement  agencies  and shops  are still badly equipped and there is no single card index of stolen credit cards. Stop-lists  are not always received by trade organisations in proper time.

The most difficult case for investigation is  the  agreement among salesmen or  between  a salesman and a customer. For instance, two salesmen can  cooperate, exchange the lost or stolen cards to carry out the  fictitious transactions.  The salesman may also  register the sale of an article to a swindler, but for all that  it is left at the salesman, and the sum paid by the financial establishment is shared  between them in agreement. The cashier is usually offered 10-20% by cash from  each operation.

Sometimes the cashiers come into criminal agreement with swindlers because of seeming impunity of the criminal  transaction. Still the only financial document  confirming the operation  with the plastic payment card is a slip  where essential elements  of a plastic card are left after a usual rolling.

 However, it is practically impossible to find out  “by eye”  whether they have been accounted  from the real plastic card or simply from a piece of plastic with extruded  data. This is the matter  swindler use.

There is one more  kind of swindle which implies the  presence of  a dishonourable salesman or some other person  having  the telephone number at his disposal to check the card. The bell allows  to find out  whether the card is on the list of stolen cards or not.  If not the dishonourable salesman  may carry out the fictitious transaction  on a large sum through his  company. If the card is inlisted stolen, he can make several transactions within the settled limit.

Criminals dispose  numerous  ways of using stolen cards. Organised  criminal groups  pay 100-500  dollars  per a stolen card  depending on some factors:  availability of a signature, how long ago it was stolen, if it is in the list of stolen cards, the period of its use by a legal owner, whether the limit is used up, if there are  any extra documents identifying a person.

In most criminal organisations  a thief   sells a stolen card to the “supplier”  who has a sufficient number of  accomplices to use it. The members of the group  do shoppings by means of a stolen card  according to the list settled by “a supplier”, seeing to that the price of the purchase will not exceed  the limits  settled by the salesman. The purchased things are sent then to the stolen goods   dealer for  sale.

The person  having a direct bearing on  a  swindle operation with the card   usually gets 40% of the profit, or he is allowed to use this card to do his own shopping before he gives it back to the “supplier”.

3. Multiple payment for services and goods  on the sums not exceeding "floor limit " and demanding  to fulfil no  authorisation. To make the calculation the criminal needs  only to forge a client’s signature.  However, cash money as the most attractive object of abuse  becomes inaccessible at the given schema. Crimes with cards stolen while being sent by the bank issuer to its clients by post  may be attributed to this category.

         Committing the misappropriation  by counterfeit on the credit cards of the banks  settled     a considerable limit of a marginal sum of the operation being fulfilled  without authorisation. The swindlers repeatedly use a marginal limit of the sum  during a day in different service offices and shops. For  example, some respectable  London banks fix a marginal  limit in 200 pounds and reiterated use  of such sum will bring the considerable sum to the swindler.

         To determine the unused part of the credit on  the criminals resort to a simple method. They ring up to the  registration centre of the company and ask to authorise a transactions, for example, on 3000 US dollars. When refused they reduce the sum up to that limit till they are allowed to. In a while  they ring again and ask to cancel a transactions. Due to all these they have  the sum on the given card which  has been  beforehand already allowed  to be paid. It is of no difficulty to obtain the numbers of valid cards.  For this purpose they use the items of information picked up by means of  hotels or  restaurant staff, with the help of accounts carelessly thrown out, car release agencies etc.

One more method  to commit swindle related to the given method  is the use of a plastic card with the criminal purposes by the card owner himself who having done large operations on a card (more often with cash dispenser) can declare that the card was stolen. In such cases accomplices happen to be involved in order to avoid a possibility of authentication.

4. Fraud with the mail / telephone orders. This kind of crimes has appeared as a result of  progressing the service of  goods and service delivery by  mail or telephone order of a customer. Knowing number of a his “victim’s “ credit card the criminal can indicate it in the order form and escape  having received an offer on the address of a temporary residence. This method is applied to obtain expensive goods such as computer and electronic equipment  etc. This  kind of fraud in the field of telemarketing is usually called "inbound". The cards numbers can be found out by means of the shop and restaurant staff , from the computer reports etc.

Swindle use of credit cards numbers  contains a wide set of methods such as fraud through a system of telemarketing and telecommunication. The number of swindle methods is numerous and has been  increasing from day to day because it is not required to present a card to make an order by mail or by telephone,  it is enough  to notify its number. The abuse in the sphere of telemarketing implies the non-authorised bargains committed  by telemarketers-swindlers and also criminals dealing with real telemarketers and companies taking  orders by mail.

The swindlers-telemarketers participate in undertaking frauds in the field of telemarketing such as "outbound" kind. By different methods these criminals find out  original numbers of cards and use them when invoicing the counterfeit accounts for orders the payment on which is daily entered in a bank account of a telemarketer. As the majority of banks have fixed the same procedure for the order accounts  as for cash, the telemarketer has a possibility to transfer money  to another account immediately or  daily withdraw  money from the account. When the crime is disclosed, the telemarketer-swindler usually escapes together with the money.

New variety of such kind of fraud is the use of  Internet for an electronic system of  orders on different goods. However, today there are  about 30 kinds of illegal operations with plastic cards through Internet:

·      payment by non-existent cards;

·      creating the false virtual shops;

·      "electronic" theft;

   ·       false payments in gambling establishments etc.

5. Multiple withdrawing a bank account.  As a rule, the mentioned crimes are undertaken  by workers of shops  and service offices taking payments from the  customers for goods and services on credit cards and  by means of  registration committed some  payment cheques  at one stroke. According to the cheques presented  the company has been accounted bigger sum of money  than the price of  the goods sold or the service  done. However, on concluding several bargains the crime is made to  close  out or abandon the company.

            The indicated method is characterised by the staff of  restaurants, cafe, bars, motels  being involved in swindle operations.  Workers of such companies making use of the customer’s carelessness or deliberately diverting his attention   make some additional  slips of plastic cards which are used  then to misappropriate material values and money.

         The key moment in this method is that unlike a shop  where   a card calculation is accomplished in the owner’s presence,  in restaurant the waiters take it away for a while and then return it with the bill. At that the card owner does not suspect that the slip (reprint from a card) presented to him as a bill or the slip together with a bill  is only one of several slips  skilfully-made  by cashier or waiter. The absence of  a date is the only thing that distinguishes  it from other slips.

 Within following several days the cashier can misappropriate cash money  obtained from other customers having shared with the waiter, meanwhile he can safely attach the accounts with the essential elements of the card owner to the reporting  and send them to the office of issue (a bank or a payment system) for paying. But for all that  for repayment Thus the governing body of the company can remain in ignorance of the fact. To avoid such operations  owners of  payment cards are recommended to be  more careful about  the documents even when signing them to make a deal with inconsiderable sums.

6. The swindle with counterfeit slips. The given way has considerably spread  under complicity of  shop cashiers. The  essentials of the method can be reduced to the use of  deliberately  counterfeit slips made by means of   applying false cliché or  type-setting  printing forms  using the information from the original plastic cards. In this case the card is mostly used  without its legal owner’s knowledge who does not admit  the fixed expenses after  the stated fact.

          Accomplices of the crime give the cashier  a  beforehand-made slip containing the information about the card number, the owner’s name and the period of validity, which the cashier  is to  arrange   fixing  the data about the service office  where the slip is registered.  After having cash money for  some goods paid to the cashier, the  sum received in cash money is indicated  on the false slip. The slip is attached to the  account, the money is seized and misappropriate  by the criminals.

7. Fraudulent use of  cash dispensers while serving out cash. Let us consider the use of cards  while  having cash money being paid out from the Automated Teller Machines (ATMs).

Canada has  more than 2,000 money access machines in operation and their quantity is more and more increasing.  Some financial companies produce special cards to be used in automated teller machines, meanwhile some machines can use only coded  bank cards like Visa and Master-Card. At any rate the card is used  with the personal identifying number  (PIN-code) to access ATM.

The PIN-code is known only to the owner of the card who is recommended to remember his number and he must write it down on the card by no means. Otherwise  when stealing the card  the criminal  obtains the personal code as well, that  considerably relieves committing the crime.

The main advantage of introducing  automated teller machines  is their  great reliability  and productivity compared with an alive cashier, that makes it  more convenient and safer  for widespread rendering services to the population. Despite it criminals successfully descend on automated teller machines   using force methods (burglary, complete destruction, etc.) as well as swindle actions. In most cases they use  an original card and a real personal code obtained by criminals as a result of theft from a legal owner or from the financial company in  a deceitful way. Swindlers are known to  call the person who has lost his card, and introduce themselves as  bank inspectors.   As if to check the registration of the card  they ask to  tell them the personal  identifying code, that  makes the account easy to access for theft by the use of an  automated teller machine. It often happens that this method  involves the swindle means dealing with the use of bank officers’ service to get from them the information about  cash deposits, about owners of credit cards with  large deposits  for  bribe.

Till recently getting money through the cash dispensers  has been    one of the most reliable and secure  ways of using the plastic payment cards, for  availability of PIN-code known only to the user guarantees  identification of the card owner and confidentiality of the customer’s access to the account. However, international practice has already fixed  the cases of large  swindle through             cash dispensers. 

8. Connecting up an electronic recording device to   a POS-terminal or  cash dispensers (“Skimming”). This type of swindle showed up not long ago and it has been fixed only in Hungary in view of considerable  technical complexity. The given kind of swindle is characterised by complete copying the whole content of  a magnetic stripe from the plastic payment card.

Restriction for  a sum of money (some hundreds of dollars) which can be paid out by a cash dispensers during a day seems to be the main factor to cut down losses.

One more preventive measure is a special computer programmes controlling the automatic pay machine. All the information the automatic pay machine exchanges  with the central computer with is coded  to prevent the opportunity  of connecting up or intercepting  the information [4]. Suspiciously frequent  paying out  money during a short period of time  or  wrong named  personal code can bring to “pocketing” the card by the automatic pay machine.

9.Other kinds of swindle. Other kinds of swindle can be related to various combinations of swindle methods mentioned above, newly appearing or those swindle methods  which has not been studied yet.

The given classification shows that  the means of committing  the swindle with plastic payment cards have their individual features. As a rule, the basis for these methods are criminal’s actions directed to  getting access of various kinds to the system of cashless settlements (preparatory actions on  a swindle commitment).  In most cases all these actions are accompanied by high qualified means of concealment, that itself  complicates the process of revealing and investigating the swindle. The research  shows  that in most cases criminals use various quantitative and qualitative combinations of several methods.  Their modification and  steady complicating  the logic connections make for appearing  new  methods the characteristic feature of which is availability  of  complicated algorithms for criminal’s actions which are more and more being perfected and modernised.


  1. The scientific - practical comment of the Ñriminal Ñode of Ukraine / Under edition of the Honoured Lawyer of Ukraine, the candidate of jurisprudence M.Melnik, the candidate of jurisprudence M.Havronjuk/.-Ê.: "Kannon", “ À.Ñ.Ê. ".-2001.
  2. M.Vertuzaev, I.Chunis, A.Tarasov, A.Jurchenko. The authenticity control of plastic payment means of the international sample // Physical methods and means of   environments, materials and products control: the Collection of scientific works. - Kiev - Lvov: the National sciences Academy of Ukraine, 1999.-ñòð.195-197.
  3. A.Jurchenko. Foreign experience in prevention of swindles with use of plastic payment cards// Information technologies and information protection: the Collection of scientific works. Zaporozhye: Legal Institute, 1998.-release 2.-pages 41-53.
  4. M.Vertuzaev, S.Hripko. Enciphering as a way of information protection // Information technologies and information protection: the Collection of scientific works. Zaporozhye: Legal institute, 1998.-release 2.

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