Fraud Prevention

If only I had $1 for every time I've heard someone tell me the benefits of barefoot running over the last 2-3 years.

As with many forms of exercise, dieting and anything health related, fads come and while it's questionable whether people end up healthier because of the fads, someone surely makes money on them.

Enter: barefoot running. A sport that would bring us back to the early days of running.... The really early days!

Regardless of whether this sport boasts medical or clinical backing (for more info on that, check out Nature: Journal of Science or the slightly more palatable read Harvard Science), a new fad backed by accolades in a bestseller means:

• a surge of interest right at the beginning
• this interest may outpace legitimate supply leaving room for new suppliers
• uneducated buyers, ones that have just heard about this new fad and are not yet aware of the right resources for info and authentic products
• the possibility of longer term high sales.

Barefoot shoes try to outrace the black market
CNN Money - August 13, 2010: 5:25 AM ET
Suddenly, you run smack into one of the perils of innovation: you've created such a heavy demand that someone else is trying to take advantage of it. In other words, you've attracted counterfeiters. They're everywhere.

So what can a company do when they are new to the market and encounter counterfeiting?

Barefoot shoes try to outrace the black market
CNN Money - August 13, 2010: 5:25 AM ET
"It's like Whack-a-Mole," Shaw says. "It's become a really huge problem, taking a lot of our time and energy."

Here's what Vibram FiveFingers did:

• With more than 200 fake Vibram websites appearing online, Vibram solicited the help of Google to shut the sham sites down
• Vibram used the World Intellectual Property organization and lawyers to help take down the sham sites, often at a cost in excess of $2,500 per site
• The International Anti-Counterfeiting Coalition can be used as a resource
• Vibram hired an investigator in China to sniff out factories making the counterfeit shoes
• But likely their single biggest success has been devoted fans blogging about the counterfeits, creating customer awareness.

Check out the full CNN Money article.

Technorati Tags: Counterfeit Fraud Prevention

When recent news came out that researchers had found a way to skirt around the https security protocols touted as the safest when doing your banking online with 168 bit encryption, it would seem media outlets hardly let the news hit the front page. Perhaps people think it’s unlikely to be a common issue?

Flashforward to Barnaby Jack’s performance at the Black Hat conference taking place this year in Las Vegas and a picture worth a thousand words; as the speaker hit enter on his laptop, bills flew out onto the floor beneath an ATM.

“With the right software, it’s actually pretty easy” said Jack before a pile of bills spilling out onto the floor.

Security researcher demonstrates ATM hacking
CNET - July 28, 2010 5:04 PM PDT
"I hope to change the way people look at devices that from the outside are seemingly impenetrable," said Jack, a New Zealand native who lives in the San Jose area. One vulnerability he demonstrated even allows a hacker to connect to the ATM through a telephone modem and, without knowing a password, instantly force it to disgorge its entire supply of cash.

Hacking into ATMs is not exactly a new idea: It was immortalized by a young John Connor in the "Terminator 2" movie, and techniques like "card skimming" and "card trapping" are well-known by police.

For full details on how the hack was performed (from a high level... Don't expect any black hat code here!) check out the full CNET article.

For more information on the Black Hat conference (an invaluable tool for keeping up with technical knowledge, code vulnerabilities and invaluable advanced fraud prevention insight) check out Black Hat.

Technorati Tags: Fraud Prevention Hacking

I was driven to post something about health care fraud recently after a discussion with an acquaintance regarding alternative medicine.

Often people seek alternative forms of medicine out of desperation; conventional science having done nothing to improve their situation, they become more willing to try out slightly more unconventional methods to solve the problem.

While some may mock alternative medicine, modern science is currently having difficulty developing drugs to combat cancer which are more effective than the placebo effect. That is to say that the placebo effect is so strong that even some alternative, conventional or even bogus remedies can appear to work.

Back to my conversation with my acquaintance....

The conversation started off involving a pet whisperer. Now, I've seen people train horses as well as dogs without the spoken word. And then there's Cesar Millan and his techniques with pooches. But what I was about to hear was something completely different.

My acquaintance, we'll call him Jim, was so concerned about his dog's health, he brought him to a dog whisperer, or moreso a canine spiritual interpreter. Wonky, I know. But to Jim it made sense. After so many horrendous vet fees where his beloved friend never got any better, this 'alternative' form of healing seemed appropriate.
A hefty fee was spent and a 5 page report on how the dog felt (this dog apparently had complex emotions) was delivered. When I found out this 'interpreter' did their work, not in person, but by viewing a picture of Fido, I realised that Jim, had become comfortable with such a scheme out of desperation.

That brings me to the 60 Minutes story that aired this past Sunday regarding bogus stem cell therapies going on in the US and abroad.

The patients seeking this treatment, in this case those with debilitating and deadly ALS, sought alternative forms of medicine out of desperation. And while some forms of alternative medicine may help to heal, the stem cell therapies described herein do not exist in most cases, have no medical proof that they do anything, make false claims of 'cures' and are being performed by people posing to be doctor's with fake diplomas. And yes, they're bilking these clients out of hundreds of thousands of dollars for a full 'treatment'.

Technorati Tags: Fraud Prevention Health Care Fraud