Date: Sat, 25 Jul 92 19:33:52 GMT
From: phaedrus@cs.washington.edu (Mark Phaedrus)
Newsgroups: comp.dcom.telecom
Subject: Re: Solve Three Problems (was Telecom Fraud)
Organization: University of Washington Computer Science
X-Submissions-To: telecom@eecs.nwu.edu
X-Administrivia-To: telecom-request@eecs.nwu.edu
X-Telecom-Digest: Volume 12, Issue 584, Message 5 of 9

In article <telecom12.578.2@eecs.nwu.edu> gast@CS.UCLA.EDU (David
Gast) writes:

[he proposes a stored-value card as a solution to fraud ...]

     There's one major problem I can see with this solution.  Most
telephones in this country are still not capable of magnetically
"reading" even the current calling cards.  So unless you plan on
replacing most of the telephones in the nation, or making the
stored-value cards unusable on any phone without a card reader, the
protection against fraud largely goes out the window; there's still
going to have to be a number on the card for people to punch into
older phones, and "shoulder-surfing" will still work just like it does
now.  In fact, I would wager that your protection from fraud would
actually *decrease* under these circumstances.  Under the currnt
system, if someone steals your card number and rings up fraudulent
calls, you can generally get the charges reversed; with fraud on a
stored-value card, the providers would probably adopt the same policy
that many providers of debit cards do now ("if your card or number
gets stolen and all the money in your card gets drained, well, sorry
about that").

     Also, unless you want to further modify every phone in the
country so that they're capable of *writing* to the cards too, the
privacy advantage is going to be eliminated as well; since the phones
won't be capable of recording usage onto the cards, the cards' value
will have to be stored in some centralized database somewhere; and
since that database is going to have to be provided with at least some
information about where you're calling from and to in order to
calculate the billing info, it will be capable of keeping records just
as detailed as those kept now (where you're calling from and to, when
you're calling, for how long, etc.).  I suppose the phone company
could be legally required not to record this information for
stored-value-card calls, but that would completely blow away your
protection against fraud.  ("Well, since we have no way of knowing
when or where those calls were made, we have no way of knowing whether
they're fraudulent or not, so we'll just have to let the charges
stand.")

     One other personal problem I have with stored-value cards: they
require payment in advance, which may be okay for those who use the
cards regularly, but is a pain for those like me who only carry a card
in case of emergency or running out of change.  Why should I give my
long-distance carrier an extra $5 or $10 of my money to take care of,
on the off-chance I need to make a calling card call someday?

> Also, since it is a stored value card, other carriers would
> have no incentive to honor the card (they won't get paid), so they
> could try to vandalize the card or more likely just reject it. Thus,
> protection from AOS overcharging.

     This is about the most Pyrrhic form of "protection from AOS
overcharging" I've seen in a while.  Are you saying that you'd rather
have a phone try to erase your $50 worth of stored value than to
overcharge you for the call?  As long as we're updating every phone in
America to deal with these cards, why not just encode the carrier
choice into the card?  You would pick up the phone, insert your card,
and then dial the number; the phone would read the carrier code from
the card and automatically select the proper carrier, without any of
this 10XXX nonsense.

> Of course, certain federal agencies won't like [privacy], so
> Congress will have to pass a law requiring that

>  (1) each phone record its number and time of use on the card; and
>  (2) that each buyer send in his/her used cards with proper identification.
>      Failure to do so would result in a $10,000 fine per card.

     If you're going to joke, try to at least joke plausibly. :) "Oh,
someone stole your wallet and your $100 stored-value card?  Gee,
that's a shame.  Well you're out that $100, and since you won't be
properly returning that card, you're out another $10,000 too."
Besides, unless you really do intend on replacing every phone in the
nation, I don't think the government will have any problem getting
that information, since as I described above, the "stored value" will
probably wind up implemented in a central database rather than on the
card itself.


Mark Phaedrus, Computer Science Major, Univ. of  Washington, Seattle, WA  
Work: phaedrus@cs.washington.edu   Play: phaedrus@u.washington.edu