Communications: electrical – Selective – Intelligence comparison for controlling
Reexamination Certificate
1998-01-07
2001-02-13
Horabik, Michael (Department: 2635)
Communications: electrical
Selective
Intelligence comparison for controlling
C235S380000, C340S005600, C340S005400, C340S005810, C340S005850
Reexamination Certificate
active
06188309
ABSTRACT:
TECHNICAL FIELD
The present invention relates to preventing fraud, and more particularly, to a method and, apparatus for minimizing credit card fraud.
BACKGROUND OF THE INVENTION
Credit cards are frequently used to buy a wide variety of products and services. A credit card transaction is started when a consumer selects goods and/or services to be purchased. These goods and/or services are brought to a point of sale (POS) clerk who inputs/scans the information pertaining to the goods and/or services into a cash register. The clerk takes the credit card and swipes or runs the card through a card reader
20
, illustrated in FIG.
1
. The card reader
20
is connected to the electronic cash register via a cable
24
and is connected to a data transmission system via a cable
26
. The consumer account is typically embossed on the card and also encoded in a magnetic strip on the back of a card. The card reader
20
stores the account information and the amount of the sale and transmits this information to a credit card authorization system. For a valid card and one that has not been reported as lost or stolen, the transaction is automatically signaled to the clerk with either a signal or light provided on LED outputs
28
, or with an authorization code on a display that indicates that the transaction has been authorized.
The clerk has the consumer sign the receipt, and the clerk keeps a copy of the receipt and gives a copy of the receipt to the consumer. The clerk is required to examine the signature on the receipt and match it to the signature on the back of the card. This is rarely done. In fact, within several hours of obtaining a lost or stolen credit card, a thief typically can fraudulently charge several thousand dollars of goods and services before the notification process typically stops the use of that card. Therefore, a need exists for an improved system to minimize fraud in credit card transactions.
SUMMARY OF THE INVENTION
The problems of fraud in credit card transactions can be minimized in accordance with the principles of the present invention by providing an intelligent credit card that includes a keypad for inputting numbers and other information, a processor for controlling the operation of the intelligent credit card, and a battery or other power source for providing electrical power.
The intelligent credit card of the present invention includes an output device for selectively outputting the credit card number when the card is activated. In one embodiment, a magnetic strip is activated by an electrical current. Once activated, the magnetic strip outputs the card number encoded thereon. In another embodiment, the credit card includes one or more electrical contacts for outputting the credit card number as electrical signals when the card is activated. In yet another embodiment, the credit card includes one or more optical transmitting devices for outputting the credit card number as optical signals when the card is activated.
The card is initially in a de-activated state in which the card is unreadable by a card reader. When the user uses the credit card, the user first clears the card with the clear key and then inputs a sequence of digits using the keypad. The received sequence of digits is compared to a stored PIN and if the received digits match the stored PIN, the processor activates the credit card.
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patent: 4575621 (1986-03-01), Dreifus
patent: 4692604 (1987-09-01), Billings
patent: 4868376 (1989-09-01), Lessin et al.
patent: 4931991 (1990-06-01), Cvijanovich
patent: 5180902 (1993-01-01), Schick et al.
patent: 5311594 (1994-05-01), Penzias
patent: 5311595 (1994-05-01), Bjerrum et al.
patent: 5317636 (1994-05-01), Vizcaino
patent: 5884271 (1999-03-01), Pitroda
patent: 5933812 (1999-08-01), Meyer et al.
AT&T Corp
Horabik Michael
Shimizu M.
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