Technology -- Cat-and-Mouse Technology

By Robert Sanzalone

Can technology help grandparents fight wire fraud?

An elderly woman walks towards the ATM with a worried look and a mobile phone to her ear. She believes it’s her grandson who is in trouble and is in desperate need of cash. As she punches the numbers on the machine, a warning flash in the booth tells her to please turn off her phone. The person on the phone now sounds frantic and tells her to hurry. The ATM stops and the transaction is not completed. The elderly woman tells the voice she doesn’t know what just happened. The voice gives a frustrated sigh and the line goes dead. The woman stands there in shock and bewilderment.

New technology may keep elderly bankers free from fraud, but for how long?

This scam, known in Japanese as “Ore! Ore! Sagi!” or the “It’s me! It’s me! Scam” has been an interesting cat and mouse game since 2003. When it began, the con artists would call an elderly person, usually posing as their grandson and request money be wire transferred in a hurry due to some misfortune. The elderly person would then go to their local bank, ask the teller to complete the transaction and the deed would be done. Japanese banks caught on to this game quickly and started to question patrons when large amounts were transferred under these familiar circumstances. The bad guys then turned to ATM machines since it would take the human questioning out of the equation. It’s now five years later and the scams continue.

Various attempts to “educate citizens” about the dangers have been mixed. Recently the Tokyo Metropolitan Police department deployed 6,000 officers to personally patrol 11,000 ATMs throughout the city. Though the number of reported scams did decrease, 94 still occurred including 16 at patrolled machines. Victims were swindled out of almost 17 million yen.

So what can the police in Japan do? Well, if technology has been used to slip past the human gatekeepers, authorities in Japan are now looking to technology as a tool to fight back.

One device being experimented with recently is a box which can detect when a phone user approaches, or even shut an ATM down in mid-transaction. The device was developed by four students from the Institute of Technology in Saitama, with parts easily accessible from Akihabara for less than 3,000 yen ($30). They have found a way to detect electric waves from a mobile phone between 1 to 1.5 meters away. This detection could then either set off a flashing sign, which could say “please turn off your phone,” or even fully shut down an ATM transaction.

The idea is simple, and with the understanding of the problem’s scale, could gain acceptance and deter the number of scams. The social norm of “turning off your phone” in public venues only took a few short years to be accepted, so it shouldn’t be too difficult for the idea of “turning off your phone at the bank machine” to become normal as well.

On the other hand, it’s questionable whether this idea is exportable. People heading towards a bank machine during a phone conversation may find it annoying when the machine closes down as they approach. Some may even go to bank branches or ATMs without detection devices just to avoid the annoyance of being shut down mid-transaction.

Regardless, the problem is very real. According to the National Policy Agency of Japan, there were 9,874 cases of wire transfer fraud between January and May of 2008 alone, costing victims over 13.7 billion yen.

One of the students who developed the deterrent device said he did it out of concern for his own grandmother. Although a great idea for now, there is the possibility that the criminals will simply come up with another gadget in the future which can scramble the signal to the device to stop it from shutting down the transaction.

The cat-and-mouse game in technology will likely continue for a while.

Robert Sanzalone is a technology writer, presenter and social media consultant based in Nagoya, Japan. Visit his Website at www.pacificIT.ca.