Fraud Free Financial Transaction MethodProvisional Patent US60/634,199
While working for a company intent on monitoring extremely high speed digital communications traffic for indications of financial fraud, I asked myself "What is the core problem. How do we solve the problem rather than treat its symptoms with technology?" The answer was one of those "Wow, that's so simple and obvious, why has no one thought of it before?
Credit card fraud and Identity theft and are hot topics these days. The motivation for both is money. Once upon a time it was impractical for thieves to covertly gain access to one account for one withdrawal, but the ubiquitous Social Security Number makes it easy to access all the accounts of an individual, and rape them for months with impunity, so every thief with a brain is engages in the plunder. Now businesses and doctors are scrambling to revert to unique numbers for each account to frustrate fraud and identity thieves. Two things facilitate credit card fraud and theft and identity theft:
- The use of the same account number for both financial withdrawals and deposits.
- The broad use of Social Security numbers as account numbers or identification for account numbers.
There is a fundamental flaw in the credit/debit card and checking systems that promotes fraud. The solution is simple. The technology needed to implement it already exists. It can easily be added on or integrated into existing telephones.
Your daily financial transactions expose you to risk, because your credit cards, debit cards and checking accounts have only one number for both deposits and withdrawals. That account number is exposed to clerks, accountants, trash collectors, telephone order takers and Web sites (webmasters, hackers, etc.) to perform either withdrawal or deposit transactions. Its dissemination puts your debit card and checking account balances at risk of theft, and your credit cards at risk of theft to the amount of their credit limits. When verification information is required, like expiration date and address, it is easy to acquire for fraudulent purposes.
Requiring the use of a Personal Identification Number (PIN) helps, but that encourages thieves to get personal, and force you to withdraw money from Automated Teller Machines (ATMs) at the end of a knife or with the threat of harming your family.
Much Like public key cryptology, the solution to this problem is two numbers for each account, one for deposits and one for withdrawals. The deposit number can be safely disseminated. The withdrawal number can be kept secret from everyone, including the owner of the account.
I recently secured provisional patent US60/634,199, entitled "Financial Transaction Method," which describes a way to make it impossible for anyone to engage in fraudulent financial transactions via theft or coercion, and makes it easier to conduct interpersonal and business financial transactions using barcodes displayed on cell phones, PDAs, retail counters, newspapers, magazines, bills,televisions and computer monitors. The proposed Financial Transaction Method can be implemented within the domain of a single cellular telephone provider, but will likely involve the cooperation of conventional banks. The same method can eliminate shipping and receiving fraud as well. Soon you will be able to replace your credit cards and checks with a safer and more convenient financial transaction method.
A Financial Transaction Method is disclosed that uses a combination of existing scanning and sensing technologies on a telephony base in conjunction with separate deposit and withdrawal account numbers to provide a means of conducting retail, shipping and personal financial transactions free of fraud and theft.
Complete patent (4.53 MB PDF)
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The implementation of this method is technicnalogically simple, but logistically difficult. It is not as difficult as it was to implement credit and debit cards, but it will take a large company or a coalition of smaller companies to implement.
Social Security Number
The Social Security card my parents gave to me in 1965 says "Not to be used for identification purpose." The Social Security number was only to be used to identify one's Social Security account, which is really nothing more than your record of contributions. Your contributions were spent by Congress or applied to past federal debt the day they were received by the Treasury Department. However, there is a way to fix Social Security.
Unfortunately, the federal government encouraged the use of the Social Security number as the number to use for financial, medical and other accounts to allegedly simplify our lives by requiring us to remember only one number for all our accounts. The real intent was to make the job of the Internal Revenue Service (IRS) easier. * If not used as the account number, the Social Security number is associated with the account number, so it can be used as an alternate access method.
The Social Security number is required to open a financial account, so it becomes the key to fraudulently accessing an existing account. Sometimes additional verification information is required, like address, mother's maiden name, telephone number or ZIP code, but it is so standard and easy to get that it is worthless as a deterrent to a determined thief. Once access is authorized, the address and other information can be changed, and new credit cards acquired.
The solution to the Social Security number problem is political. The legislation that requires the use of Social Security numbers for other than Social Security account identification must be repealed. Write your congressperson or send a version of this letter to your editor.
In the mean time you can demand account access constraints that require more stringent requirements.
| W.T. Holmes | Innovations |