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FTC Kills Dirty Online Check Processing Outfit
coondoggie writes "The Federal Trade Commission today got a US District Court to stop permanently what it called the illegal operations of an Internet-based check creation and delivery service, and to require the group to give up over half a million dollars in ill-gotten gains. According to the FTC, Qchex.com created and sent checks drawn on any bank account that a Qchex user identified, but did not verify whether the user had authority to draw checks on that account. As a result, fraudsters worldwide used the Qchex service to draw thousands of checks on bank accounts that belonged to unwitting third parties. 'The evidence shows that the launch of Qchex.com was a "dinner bell" for fraudsters and resulted in a high number of accounts frozen for fraud...' said District Court Judge Janis Sammartino."
1. wait for /. to go offline
2. get first post
3. ?
4. profit
Stay tuned for new sig...
Checks are insecure. The lesson: withdrawing money from people's account should require more than an account and bank routing number.
"In prison you just have to shut your eyes and take it. Here you have to shut your eyes and give it."
Also, I read it somewhere on the Internet. Maybe even the creation of some of these oh-so-clever /. legends?
Freedom = (Meaningful - Coerced) Choice != (Speech | Beer^2), and sad sock puppets' bad mods avail them naught.
I just found this 2005 MSNBC article that talks about Qchex.com (the company mentioned in the above), and check security.
"In prison you just have to shut your eyes and take it. Here you have to shut your eyes and give it."
who gives a fuck? this place is a shithole.
I want whatever those guys were smoking when they thought this was fraud-proof.
If you can read this, it means that I bothered to log in.
Linux just isn't ready for the desktop yet. It may be ready for the web servers that you nerds use to distribute your TRON fanzines and personal Dungeons and Dragons web-sights across the world wide web, but the average computer user isn't going to spend months learning how to use a CLI and then hours compiling packages so that they can get a workable graphic interface to check their mail with, especially not when they already have a Windows machine that does its job perfectly well and is backed by a major corporation, as opposed to Linux which is only supported by a few unemployed nerds living in their mother's basement somewhere. The last thing I want is a level 5 dwarf (haha) providing me my OS.
The real problem is the ACH system? It relies almost exclusively on blind trust. Trusting that whomever I'm debiting authorized me to debit them, etc. It always amazes me when I build an ACH file to send to the bank as part of my business and send it through without a hint of a question from the bank or the processor. They just merrily send the file on through. I guess the bank and processor are counting on me being a good citizen. Hmmm...
I'd happily pay you Tuesday for a biopsy today!
At my previous company, we got frequent emails from qchex/neovi.com sent to an email address that must have been scraped from a website -- no-one used it as their personal address, so there was no legitimate reason for the to be sending to that address.
The real "Libtards" are the Libertarians!
Are you saying that this linux can run on a computer without windows underneath it, at all ? As in, without a boot disk, without any drivers, and without any services?
That sounds preposterous to me.
If it were true (and I doubt it), then companies would be selling computers without a windows. This clearly is not happening, so there must be some error in your calculations. I hope you realise that windows is more than just Office ? Its a whole system that runs the computer from start to finish, and that is a very difficult thing to acheive. A lot of people dont realise this.
Microsoft just spent $9 billion and many years to create Vista, so it does not sound reasonable that some new alternative could just snap into existence overnight like that. It would take billions of dollars and a massive effort to achieve. IBM tried, and spent a huge amount of money developing OS/2 but could never keep up with Windows. Apple tried to create their own system for years, but finally gave up recently and moved to Intel and Microsoft.
Its just not possible that a freeware like the Linux could be extended to the point where it runs the entire computer fron start to finish, without using some of the more critical parts of windows. Not possible.
I think you need to re-examine your assumptions.
Man, and I just NOW hear about this!
"He who would learn astronomy, and other recondite arts, let him go elsewhere. " -- John Calvin, commenting on Genesis 1
I just read Frank Abagnale's autobiography and another book that he wrote. He was one of the greatest con men who ever lived, cashing two or three million in bad checks in the 1960's, before he even turned 21. Anyway, the last book of his I read was written around 2002 or so, and he was pretty spooked by the idea of people being able to pull money from accounts simply by knowing the routing and account numbers. He designs checks nowadays and does security consulting, among other things.
Do you have ESP?
Who in this day and age takes cheques but wont take other forms of payment? (be it credit cards, cash, paypal or whatever else)
It's comforting to know that my entire savings is up for grabs every time they mail me a checkbook.
and every time you give anyone a check, or cash any check (both transfer the same information.) after all this is not the last way to use a ABA# + account # to clear a bank account. I have in my canceled checks the account number, and bank ABA number for everyone who has cached one of my checks. I think we had a social agreement not to turn over the other guys bank info to a Nigerian scammer and wipe them out. But who knows...
BA-ZIIIIIIIIIIIIING!
What is the article talking about? I had no problem connecting to Paypal today.
Personal checks haven't been in use in Finland for 30 years. What we have is a system of personal direct deposits. So instead of authorizing the payee's bank to withdraw funds from your account, you transfer funds from your account to the payee's bank.
Yes, everybody is virtually forced to own a bank account.
I live in Australia and have always wondered about the security of cheques because of the place your bank account number on the cheque as well as a incrementing cheque number. The first thing I would do is make the cheque number pseudo random, so that someone who was able to get an image of a cheque wouldn't be able to create another valid cheque, just by increasing the cheque number. Even the account number could be a random number... which points to a record at the bank which determines which account the money has to come from. I think these changes could probably be implemented individually by a bank as well...ie. it wouldn't need other banks to know what is going on.
HAHAHA!!! Seriously, what a retarded system!! I'm amazed this is possible. I'm glad and sad at the same time, that I don't live in US.
Heck, you can actually buy a check printer yourself which can even use the same magnetic ink that bank-issued checks use. Nothing illegal in that.
Never email donotemail@WeAreSpammers.com
This is just like the federal government - get rid of one of the symptoms instead of the actual problem.
we dont have cops at every grocery store watching you sneak gumdrops from the candy bin, we dont have cameras on every 20 ft of highway, we dont have metal detectors on every building entrance to prevent guns entering the building.
if massive fraud becomes a problem with checks, then yeah, they will shut the system down. but it basically just hasnt happened yet. and forcing millions of people (many of them who probably dont have computers) to some alternative system , does not "make business sense".
there are hundreds of thousands of payments every day for 10, 20, 50 dollars, for gas bills, phone bills, cable bills, etc, that are working OK with checks right now. people are used to it, it is relatively cheap, (there is no 3 percent fee... just a postage stamp), it gives you the allmighty Paper Trail geeks are always talking about in regards to elections. (even with check21, you still have carbon copies which can be matched with the scan). A lot of people dont have computers anyways. People without bank accounts at all can even pay this way using money orders. People without credit ratings can use it to. Do you realize how many people out there can't get a credit card?
Shut down the check system, and you need to take care of all these people, and make sure they understand this new system... especially the 85 year old retired person who has never touched a computer in their life.
And you think fraud with checks is bad, wait until you have millions of users with passwords like 'snowball' and 'hotdog' paying their bills online. people who dont know what 'anti virus' software is, let alone how to install it. you aint seen nothin about fraud yet.
my company bought several metric tons of concrete from your company. i need to pay you 500,000.
am i going to use a credit card? my payee loses 3 percent... thats 150 dollars!
am i going to use cash? hah are you f'in kidding?
am i going to use paypal? see credit cards problem. paypal probably doesnt even authorize that.
am i going to use some computer wire transfer? how? my secretary has been printing our checks for 30 years, it costs a few cents for MICR toner, envelope and postage stamp... but ...
if you have a better way worked out, let me know. thanks.
Actually, all you need is to have the check number, account & routing number hashed with a secret key known only by your bank & check printing company. Have this unique hash (unique to each check number) appear on the bottom of each check, and the bank can refuse to clear it if it doesn't match up, or if a check number is duplicated. You end up with the same paper check everyone is used to, but with a bit more security. The only way fraud can happen is if someone steels your blank checks, or duplicates an uncashed check and changes the amount.
You can go a step further and include a maximum dollar amount with the hash, and have separate checkbooks for small vs. large amounts
Yet you come back again and again.
protip: no all Anonymous Cowards are the same person
You mean his belly hangs over his belt as much as Ron Jeremy's does?
The article doesn't say how much the perpetrators netted from this scheme, but it is a pretty safe bet that it is a lot more than the $500k penalty, probably by about an order of magnitude. I did see a comment about "thousands" of checks.
Typical FTC "penalty". Make the crook pay back 10% or so of his take and promise not to do it again.
One additional thing. This can be implemented using the existing system, by an individual bank if they desire. Since the account number begins with a bunch of zeros, the hash (or a fingerprint of it at least) can be stored where those zeros are. So the first 10 digits become the hash fingerprint, and the remaining digits are the actual account number.
LOL, that explains it then
TARP
Seditiously,
Kilgore Trout