3G supplier warns of mobile scam

Computer departments of retailers and telecoms companies need to be alert to a possible new wave of cyber-fraud, because of the...

Computer departments of retailers and telecoms companies need to be alert to a possible new wave of cyber-fraud, because of the launch of third-generation (3G) mobile telephones.

Tania Taylor, product marketing manager for Alcatel Telecom, a fraud management group with expertise in IT, delivered the warning last month at the Crime 2001 conference in Ashford, Kent.

Taylor said that because 3G phones will be used to buy goods and services, a thief or fraudulent subscriber using a fake credit card number could use 3G handsets - which route voice and text messages via the Internet, rather than radio base stations - to order all sorts of electronic goods.

"You could lose an absolute fortune," she said.

For criminals wishing to defraud retailers over the Internet using card-not-present scams, the mobility offered to 3G phone users is an advantage.

In addition, retailers might assume that subscribers to a 3G phone service will have been screened by operators and are therefore trustworthy for large orders.

Taylor also pointed to the possibility of disputes arising over liability. She said Internet service providers are rarely held liable for online crime, with credit card companies and retailers picking up the cost of cons such as card-not-present fraud, because it is assumed that service providers know little about their customers.

However, this may well not apply for mobile commerce deals, where retailers might claim that telecoms firms should pay, because of the expectation that they would have screened their subscribers in advance.

Yet another threat could be the use of 3G phones to spread viruses.

Also, if a 3G subscriber uses their phone to access an electronic purse, a thief would have access not only to free calls, but to a powerful shopping tool once they have cracked the password.

Threats to mobile commerce

  • Card-not-present scams

  • Operator screening

  • Virus distribution

  • Access to electronic purses.

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