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Mobile & Wireless
Security
Elephant Talk subsidiary ValidSoft hopes to improve ATM security
VALid-POS checks transaction location against cell phone proximity
by staff from releases, additional reporting by Chris Snow
According to Elephant Talk Communications, using the ATM at your bank or supermarket seems like a safe way to get your money, but it's not. Someone may be watching, stealing the information on your card and your PIN number. The thief then uses the information to drain your bank account.
This type of fraud is called "ATM skimming." It's been around for at least a decade, but now it's on the rise based on thieves having more sophisticated technologies. "ATM skimming" accounts for a reported loss of over $1 billion per year.
Technology from ValidSoft, the wholly-owned subsidiary of Elephant Talk Communications, Inc., allows banks to spot a thief's attempt to use your ATM card information to withdraw money -- and do it in a split second while the transaction is being processed. That way, a bank can prevent the withdrawal and foil the theft. "Our technology can help put ATM skimmers out of business," says ValidSoft CEO Patrick Carroll. "It enables banks to identify legitimate transactions, so that your own withdrawals aren't blocked by mistake."
According to Carroll, a more effective solution is ValidSoft's system called VALid-POS: "Our software taps into information about the location of your cell phone. It anonymously compares the proximity of your phone to the location of the attempted withdrawal. If your cell phone is miles away from the ATM machine, then thieves are probably at work with your card information. Banks and card companies that have the VALid-POS software can thus thwart the attempted theft."
Carroll expects nothing less than a paradigm shift as a result of this advancement, and the numbers back him up. Historically, theft protection algorithms have been 10% effective in stopping fraudulent transactions, with a corresponding false-positive rate of 90%. ValidSoft's claims their system is effective in a whopping 99% of such cases.
So what about a "stolen purse" scenario, in which a thief steals both your credit card and cell phone? In those situations, Carroll says, a victim would likely become aware of the theft very quickly, alerting their bank immediately. Similarly, a person is likely to notice a missing cell phone far more quickly than they would a missing credit card.
"Very small amounts of data" are used in the implementation of VALid-POS, the signal simply "piggybacks on already present phone network communications."
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