ATMIA Europe Report for ATMIA Post Q3 2005 Edition

1. European Central Bank a. Euro note Re-Cycling Policy There appears to be confusion regarding the framework document recently issued by the European Central Bank for implementation and regulation by local National Bank organisations. The principle areas of confusion rests in the requirement to only issue bank fit notes for ATMs, with the limited relaxation of manual inspection of bank fit notes for ATMs in off premise locations. It should be recognised the ECB framework document only applies to the Banks, and not the Retail sector. Consequently reference to ATM cash fill also refers to Bank ATMs in an off premise location, and not at present to the independently deployed ATMs in the off premise locations. The detail of how these will be implemented is of concern to the ATM Industry, and input will be required to ensure the ATMIA interests are best served. b. ATM Environmental Project ATMIA Europe recently provided a information to the ECB, regarding the geographical breakdown of ATMs by type (Full function, Cash only, TTW, and standalone), together with typical power consumptions (standby mode and transaction mode) 2. European Seminars ATMIA Europe has held the second phase of European seminar in Copenhagen which provided selected presentations covering the two main themes of ATM security issues and improving the ATM business proposition. In particular we addressed the fraud related problems in terms of detection and deterrence. The next seminar in Prague will follow a similar theme as both Edinburgh and Copenhagen which were well received. 3. European Standards ATMIA Europe are members of the BSi GW/2 committee responsible for : Defining safe standards (secure storage of cash and valuables). The BSi committee also provide input to the EN committee. Bank Note Degradation Sytems BSi GW/002/001 e-committee 4. UK ATM Crime Some Successes Card Fraud Busting Police Squad smashes through the 100million savings barrier - Successful prosecution sees Romanian card gang get 22.5 years The sentencing of a gang of Romanian cash machine card fraudsters at Southwark Crown Court today took the banking industry-backed special police squad, the Dedicated Cheque and Plastic Crime Unit (DCPCU), crashing through the landmark figure of 100 million rescued from the hands of fraudsters since its inception three years ago.

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Operation Quartz Our joint operation with the National Crime Squad saw DCPCU officers arrest an employee for conspiracy to Defraud. He apparently used a number of the compromised credit cards found at the companys premises and has been interviewed pending trial. Operation Weasel The examination of a computer and 310 counterfeit cards revealed another 2,100 compromised accounts three men have been further interviewed and bailed to await a CPS decision on charging. Operation Khaki Three men were arrested and substantial amounts of heroin and cocaine were found in their possession. Forensic analysis of computers seized at the same time found 875 new card numbers. These have been circulated to the industry for blocking and evidence gathering. Operation Ecru This long-term account takeover operation has resulted in numerous arrests and on 20th June the fifth, sixth and seventh alleged "bank insiders" were charged on CPS advice. On the same case, information and images passed to the MPS Paedophile Unit resulted in charges against a bank insider for possession of indecent images of children. Operation Russett An offspring of Operation Ecru investigating bank insiders acting with other criminals to take over bank accounts. A man was arrested after he entered a bank branch in possession of a false passport in the name of a Premier account holder and bearing his photo. He attempted to change the address of the account holder to allow others to transfer funds from the account. He was charged and appeared at court. Operation Orbit Officers arrested a man as a result of a long investigation into the theft of data at a compromised point of purchase (CPP). He was identified as present at a computer terminal at a computer company at the time it is alleged that a software program was opened and a number dialed, allowing credit card data to be downloaded unlawfully to criminals who subsequently used the compromised card numbers to commit fraud. Operation Hoodwink The less glamorous side of the DCPCU can involve painstaking work. After days of piecing together shredded documents, which turned out to be customer copies of sales vouchers found in his shop in Peckham. These sales vouchers related to cloned/counterfeit SWITCH cards subject to substantial fraud spend. He was also questioned about three lost/stolen cards found in the shop on the same date. Operation Lizard Sometimes the job involves waiting and watching. After weeks of proactive policing, a Romanian man was arrested at an ATM in possession of re-encoded top-up cards. DCPCU officers executed search warrants at three addresses frequented by him and his associates in Sudbury, Watford and Abbots Langley. A further three Romanian men were arrested at the Sudbury address, and a Romanian female was arrested on the Isle of Sheppey she was the occupier of the Abbots Langley address and believed to be visiting a man in prison on remand for similar offences. A complete ATM factory was discovered in a garage at the house in Sudbury and a credit card reader/ writer was found at the Abbots Langley home. In total 40,000 in cash was recovered along with over 60 encoded mobile top-up cards and a laptop computer. On examination the computer contained 130 further credit/debit card numbers. All four suspects were kept in custody and the case continues. Other disruption results The Unit disrupted 90 different teams of fraudsters, recovered 25 credit cards and over 1,000 cheques with a face value of 4.5 million. Information from the Unit passed to Operation MAXIM resulted in the arrest of three Algerian Muslim males who for 2 years had been producing extremely high quality identity documents on plastic cards, such as driving licences, NI cards, NHS cards. This lucrative trade involved a number of runners who fetched photographs and

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details and delivered the cards on bicycle in the Brixton area. 85,000 in cash was found under the principals bed giving some idea of the money to be made in this type of criminal enterprise. And at court... Operation Zebra An investigation that started in 2003 and featured on ITVs Hot Plastic programme concerned a mobile phone shop with a collusive merchant. The total value of the loss to the UKs banking industry was 1.5 million. After a two-month trial the owner and two employees were found guilty. The two main characters were sentenced to 18 months each and the shop assistant was given 12 months suspended for one year. The financial confiscation hearing is due in September when 285,000 in recovered assets will be determined. The balance of the stolen funds remains untraced and its believed that they were sent to Karachi. This operation is an excellent example of cooperation between the DCPCU and the Regional Asset Recovery Team. Operation Felix Another 2003 case that has finally reached a successful conclusion. This operation relates to four collusive merchants processing high numbers of below floor limit transactions. This is known within the industry as a bust out fraud. The case focused on four Fried Chicken fast food outlets operated by a group of Sri Lankan suspects from the same family. The shops were opened in February, March and May 2003. During this time the merchants turned over 270,000 in card transactions. Initial review of this activity indicated that almost all of these transactions were fraudulent. In particular they concentrated on processing accounts from one bank that reported losses of 6.35 million pounds on approximately 100 accounts. Five men were charged and four were convicted. Operation Valour The gang of five Romanian illegal immigrants were caught by a surveillance operation run by the DCPCU in February this year following a tip-off from banks and cash machine network operator LINK, who had identified that a number of cash machines were being targeted. The gang of four men and a woman fitted false fronts and pinhole cameras to a number of cash machines across London. The camera captured the personal identification numbers (PINs) of unsuspecting customers while a skimming device built into the false front captured the electronic details of the cards. The information was then downloaded onto a computer and turned into counterfeit cash cards within hours. The fraudsters then made rapid withdrawals from as many accounts as possible overnight. The gang had cloned 1,233 bank cards and netted 643,000. All admitted conspiracy to defraud over a period up to February 2005. All the gang members were recommended for deportation following their sentences: ATMIA Europe continue to provide valuable input to a range of associated ATM industry organisations responsible for addressing and coordinating ATM crime issues. Additionally the advantages of GASA and Cognito are continuously promoted. 5. ATMIA Europe General The first quarter of 2005 has seen the first of the European Seminars for 2005. These have now been confirmed as occurring in: Edinburgh - April Barcelona - May Copenhagen - June London (SEC5) - October Prague - November Regards Graham McKay Exec Director ATMIA Europe

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