Method of conducting anti-fraud electronic bank security transactions having price-date-time variables and calculating apparatus thereof6678666Abstract A method of computing and verifying an authorization code for a transaction. The method includes creating an algebraic formula and storing the formula in a validation unit and a calculating apparatus. A calculation is made by entering values for variables of the formula into the calculating apparatus, which substitutes the values for the variables into the algebraic formula to calculate a value for an authorization code. The variables and calculated value for the authorization code are sent to the validation unit, which calculates the authorization code and determines a match between the values for the variables as determined by the calculating apparatus and the values as verified by the validation unit. The validation unit allows payment authorization only if a match exists between the values for the variables as determined by the calculating apparatus and as verified by the validation unit. Claims I claim: Description I. BACKGROUND
(a) $4,985.23001 = 4985.23001 (d) $00.0157 = .0157
(b) $124.352 = 124.352 (e) $01.0156 = 1.0156
(c) $123,901.01 = 123901.01 (f) $1,365,789.17 = 1365789.17
(j) D=Date: using Standard Military Time, the day of a charge represented by the combination of numbers being run together, always beginning with a decimal point (.), followed by the 2-digit month (mm), followed by the 2-digit day (dd), and ending with all the digits of the year (y---y). D=(Day)=.mmddy---y
(a) D = Feb. 23, 2001 = .02232001 (d) D = June 4, 1998 = .06041998
(b) D = Dec. 6, 10140 = .120610140 (e) D = Apr. 21, 2009 = .04212009
(c) D = Jan. 1, 982 = .0101982 (f) D = Nov. 10, 2545 =
.11102545
(k) T=Time: using Standard Military Time, the time of a charge represented by the combination of numbers being run together, always beginning with a decimal point (.), followed by the 2-digit hour (hh), followed by the 2-digit minute (mm), and ending with all the digits of the second (s---s), however, said time sometimes being estimated by dropping all fractions of a second after the hundredths place. T=(Time)=.hhmms---s
(a) T = 14:33:311/2 S.M.T. = .1433315 (d) T = 00:00:01.01 S.M.T. =
.00000101
(b) T = 12:32:21.9 S.M.T. = .1232219 (e) T = 12:01:59.1 S.M.T. =
.1201591
(c) T = 04:27:21.01 S.M.T. = .04272101 (f) T = 00:02:01 S.M.T. =
.000201
(I) A=Authorization Code: the resulting, computed number after a C-device has substituted the values of D, T, and P through said C-device's predetermined formula. (m) K=Combination Number: the string of variables M, L, S, P, D, T, and A being run together in a predetermined sequence. (n) R=Formula Life Range: the time span or range of the existence of a formula being represented by the exact date/time point of establishment of said formula, being followed by a hyphen (-), and ending with the exact date/time point of the alteration or deletion of said formula. R=date/time point of establishment-date/time point of alteration or deletion (a) Feb. 23, 2001 14:21:21-Feb. 23,.2002 15:21:35 (Expired) (b) Jan. 21, 1982 02:02:21-Jan. 22, 1999 14:28:56 (To Date) (c) Dec. 19, 2045 08:09:25-Mar. 20, 2046 02:24:23 (Expired) Important note: The formula life range is recorded at the establishment of the very first formula. The deletion point of an in-force formula would be verified as "to date" and the recording V-device would have a clock displaying the current date and time that variables of D-T would be allowed for use. Variables of D-T received by a V-device having a combined value later than what is displayed along the V-device's clock cannot be validated. For this reason, it is preferable to have a C-device's clock set slightly behind that of a V-device. When a formula is deleted or changed, it is considered expired. A formula and its life range need only be stored when a charge-credit is recorded by a V-device during the life of said formula, since only charge-credit deposits can later be turned into available funds even after the life of said formula. A previous formula can then be deleted after all charge-credits during the formula life range of said previous formula have been used. (o) Electronic Security Deposit: an electronic deposit being made by an account holder by giving a merchant S-P-D-T-A data to be run along a network and allowing the price P to be credited back to said account holder's serial number S so that the later changing of a formula F will not hinder later withdrawal of said price P by said vendor. (p) Date/Time Combination or D-T Combination: a timepoint being stored in memory by a V-device which is the exact moment of a charge to an account. IV. OBJECTS AND ADVANTAGES Besides the disadvantages of the prior art methods, several advantages of the present invention are: (a) to provide a method where a PIN code must be entered into a C-device, but only as needed every predetermined time period, as established by the authorized user, so that a lost or stolen C-device cannot be used without reentry of said PIN code, as determined by the card holder's pre-established time period; (b) to provide a method so that a formula F for calculating an authorization code can be conveniently-changed by the account-holder if said formula is discovered by someone other than the bank or account holder, but does not interfere with a third party from obtaining a preset limit of annual fees, nor compromises the security of the card holder; (c) to provide a convenient method and system for calculating the value of an authorization code by providing a compact, versatile self-calculating apparatus with an internal clock, preset stored formula and variables of D for date, T for time, and P for price, so that calling to get an authorization code from a bank is unnecessary and fraudulent, double charges cannot be made on an account; (d) to provide a convenient method for making purchases by requiring that an authorization code be necessary to validate any and all charges; (e) to provide a method of making purchases by providing a C-device containing a transmitter with read-only-memory means and a pre stored formula being stored along a parallel circuit at the time of a data transmission, whereby said C-device is capable of transmitting an authorization code and given variables to an R-device without said C-device's preset formula F being readable or changeable by said R-device during the transmission; (f) to provide a method that allows a merchant to be located when running an account number and only having an X number of times to run an invalid authorization code before not being able to run said account number at said location for a predetermined time period, whereby stopping hackers from guessing numbers and allowing possible investigation of said merchant; (g) to provide a method of conveniently producing a formula for each individual account by allowing each account holder the luxury and flexibility of calling in to create one's own formula, whereby providing increased security to said account holder if the formula of a C-device is discovered. (h) to provide specifications of a compact, versatile, and inexpensive calculating apparatus capable of being affordably mass produced by banks or financial institutions without the need for customization of every calculating apparatus, such as the stamping of each individual account holder's name, account number, or other data onto said calculating apparatus, but by instead allowing an authorized user the ability and flexibility of entering in one's own account information, storing one's own self-created formula, and storing one's own self-made PIN code and its reentry preferences into a generic, usable-by-anyone calculating apparatus. V. REFERENCE SYMBOLS IN DRAWINGS Figures and Reference Letters: A=Number representing the Shift Value of a Function Key. Example: pressing 7/P when a 1 is displayed here would yield a 7; pressing the same key when 2 or 3 is displayed yields the second or third function, being the P. B=positive or negative value of a number C=LCD Screen D=Location of the Built-in Electronic Radio Transmitter (Read-Only-Memory Design) E=Card Swipe (Read-Only-Memory Design) F=Function Key H=MEM A=Memory A for storing Serial, PIN, and formula data in a C-device I=Circuit for transmitting data from MEM A to MEM B J=Switch for opening/closing of the circuit in I K=MEM B=Memory B for temporarily storing received data from MEM A Other Functions: a) P, D, T, A Keys for entering variables into a formula b) .pi., .div., +,=, and other functions for building an equation utilizing P, D, T and A c) In=letters-numbers for changing between numbers and the alphabet display d) cl=clock function for entering the time/date in a C-device's clock e) LC=Last Charge for using the exact same P, D, T, A data of a previous charge f) ENT=for Entering the value of a PIN, price, formula, or other values g) Sft.fwdarw.=Increase the Shift Value by 1 h) Sft.fwdarw.=Decrease the Shift Value by 1 BRIEF DESCRIPTION OF THE DRAWINGS The invention will be better understood, by way of example, with reference to the accompanying drawings, wherein: FIGS. 1 and 2 are flow diagrams illustrating sequential process steps according to a method of the present invention; FIG. 3 is a front view of a C-device suitable for implementation of the present invention; FIG. 4 is a front perspective view of the C-device of FIG. 3; FIG. 5 is a flow diagram illustrating transmission of S-P-D-T-A data to an R-device according to the present invention; and FIG. 6 is a flow diagram illustrating establishment of multiple accounts according to the present invention. VI. DETAILED DESCRIPTION OF THE DRAWINGS In S1 of FIG. 1, an account holder creates or establishes a PIN code and formula for calculating an authorization code and stores said data into the received C-device's memory. A formula can have predetermined requirements being limited to a preset palette of numbers and mathematical symbols to prevent undefined answers from occurring and to cut costs of having a large apparatus, but should also allow enough formula-making abilities for an account holder. In S2 of the preferred embodiment, an account holder calls a bank and establishes the same formula previously stored in the C-device into the bank's records. A telephone representative can verify identity by requiring the correct answering of questions to begin account activation, or the traditional practice of verifying an authorized user by identifying the location of a call may also be used. The representative then enters the account holder's chosen formula into a computer system so that a V-device has on file a copy of the method used to compute an authorization code. Each account holder preferably calls in to make one's own formula so that a computer or other calculating means is unnecessary to produce a plurality of formulas. This also keeps the cost of producing formulas for every individual account holder down to a minimum. When an authorized user wants to make a purchase, as in S3, the authorized user follows S4 and enters his preestablished PIN code into the C-device to begin activation of the C-device's calculating abilities. For the authorized user's own convenience, it is preferable to have a customizable feature that allows the calculating function of the C-device to remain operable after a preset time period so that constant reentry of a PIN code is unnecessary. The C-device turns on only if the code is correct. If the PIN is wrong, the dotted line path is followed. In the flowchart, the dotted line paths represent an incorrect path being taken, which all lead to an invalid message or a decline code. After activation, the authorized user enters the price P, being S5, into the C-device's input receiver. At S6, the C-device then calculates and displays an authorization code along with the current date and time used to determine that aforementioned authorization code. In S7 of FIG. 2, the C-device or account holder communicates or transmits the values of S-P-D-T-A to an R-device for payment submission. At S8, the R-device receives the S-P-D-T-A data and transmits this along with the merchant's M-L data to a V-device. At S9, the required combination number, being M-L-S-P-D-T-A is received by a V-device for verification purposes. When the V-device receives the data it verifies that the merchant and location are valid and also verifies that the predetermined amount of invalid authorization code transmissions has not been expended for that particular merchant If the merchant is not licensed to do business, or has made too many invalid transmissions for that day, the dotted line path is followed. In S10, the V-device checks to see that the D-T combination is within the life range of the pre-established formula. It would not make sense for the V-device to receive a D-T combination representing a time period before the establishment of the account. If the combination is not within the range, the path changes to DC. If the D-T combination does check through, S11, being the V-device checking in its memory to see if the received D-T combination has been used for a previous charge. If a previous charge-credit was established into the V-device's memory, the same D-T combination may be allowed, but once a deposit is permanently withdrawn, it is stored into the memory of the V-device and the funds cannot be withdrawn twice. The path goes to DC if an R-device transmits a D-T combination that is found in memory. If the D-T combination is not found in memory or is found but checks through, the V-device follows S12 and substitutes the received variables of S-P-D-T-A into the account holder's pre-established formula to determine if a match exists. When a match does not exist, the dotted line path is followed and the V-device stores the time of the invalid charge in a memory to be used as a point against the merchant. However, S13 shows that other predetermined factors may also be required by the bank to be satisfied, such as the account holder having sufficient funds or credit limit and that the C-device has not been reported lost or stolen. At S14, the V-device actually authorizes payment to the R-device. However, the V-device only allows payment authorization if the M-L data is valid, the merchant has not transmitted more than the allowed invalid messages, the D-T combination is within the formula life range, the received D-T combination has not been used twice as specified, all variables in the pre-established formula balance with the given authorization code, the credit limit is sufficient, and the C-device has not been reported lost or stolen. In FIG. 3, the front side of a C-device is shown. When a C-device is received by an authorized user, one uses the cl key to establish the time. The authorized user then uses the In key to bring up the alphabet screen, uses the shift keys to move back and forth along the LCD, and presses ENT to enter in a selected letter. The user does this for all letters until the account holder's legal name has been stored. A formula can be stored using the variables of D, T, P, A, being arranged in some form of equation. Any other mathematical values such as .pi. may also be added if desired. The authorized user also enters in his assigned account number, which usually comes from the bank, being displayed on a printout. The user then shifts along the alphabet display until the PIN MENU comes up. After pressing ENT, the account holder enters in a predetermined set of numbers, presses ENT again, establishes a time preference from a preset selection of values, and finally stores the data by finishing with ENT. The main advantage for allowing each account holder to enter in one's own data is the tremendous savings to the bank. A financial institution does not need to stamp on names and numbers, but can mass produce a plurality of generic calculating apparatus without making as many customizations. In addition, a C-device can be used over and over again even with different account numbers from different banks! FIG. 4 displays the side view of a C-device. In the preferred embodiment, a C-device should be thin enough to allow it to be carried in a wallet or purse without taking up too much space. A replaceable or rechargeable battery can be used to store energy necessary to hold time or other data. An electronic radio transmitter is available to allow an account holder to withdraw funds from an ATM machine. FIG. 5 diagrams how a C-device can transmit S-P-D-T-A data to an R-device without a stored formula being read or altered during a purchase transmission. This procedure is actually an equivalent to giving a C-device a read-only-memory design. When a PIN and formula are originally stored into a C-device's memory, the data is held in MEM A. When a price is entered into a C-device, S6 is performed and the value of an authorization code is calculated in MEM A. After the calculation, the value of A and the other values of S-P-D-T are sent to MEM B along a closed circuit, the switch at J being closed. After the required data is stored in MEM B, the retractable switch at J is opened along the circuit. The switch is opened and the C-device can then perform S7 without the formula data being read during the purchase transmission. Since MEM B is also rewritible, it is important that the data within MEM A be erased completely before the switch at J is reclosed. This prevents computer viruses from "infecting" or altering the stored formula in MEM A when the switch is reclosed. FIG. 6 diagrams how a plurality of accounts can be made or established. In S15, an account holder receives a C-device and a computer form containing his Serial number and the spelling of the account holder's name as it is to be entered into the received C-device. In reality, the account holder's full name is actually transmitted along with S-P-D-T-A data during a purchase transmission. It is not mentioned much, since the main purpose of this specification is to focus on how an authorization code is developed, and not to concentrate on how traditional credit cards are verified. It is mentioned now, however, since name verification does become important if banks are going to allow any C-device to be used for account activation. The reason is to prevent one account holder from cloning another account. A cloned account would be harder to make since a copier must also have the correct spelling of another user's name in addition to the serial number. Furthermore, the copier would also need to know the other account holder's formula in order to make charges. In S16, the authorized user creates a PIN code and the time interval that the created PIN must be reentered. The PIN and its interval are then stored into memory of the C-device. In S17, the authorized user creates his desired formula and enters it into the C-device. At S18, the authorized user then calls his bank to activate his account and store his formula. A telephone representative then verifies identity by requiring the correct answering of questions to begin account activation. The traditional practice of verifying an authorized user by identifying the location of a call is also used. If the caller is not authorized to activate the account, the dotted line is followed to DA. The representative then enters the account holder's chosen formula, being S20, into a computer system so that a V-device has on file a copy of the method used to compute an authorization code. The bank representative can now wait for calls from others wishing to activate an account. VII. OTHER EMBODIMENTS Another embodiment of the present invention takes the form of an electronic checking or savings account with an account holder having calculating means to determine an authorization code. A formula is then established by the account holder by giving information to a bank's telephone representative so that said formula can be entered into a computer database so that automatic electronic withdrawals can be later verified by a V-device. Preferably, said formula should have an algebraic equation with a pre set pallet of symbols and numbers with predetermined restrictions for constructing formulas so that authorization codes having undefined values or error messages can be prevented. Other embodiments can include a method of calculating an authorization code comprising an algorithm with letters or symbols used to substitute numbers or variables. Another embodiment of the present invention discloses a method of holding an ant electronic security deposit without causing complications to an account holder. When an account holder wants to make a security deposit to a company, he makes the exact same steps as for making a purchase. However, when the vendor receives the required S-P-D-T-A data from a card user, the vendor immediately credits back the account after a charge is made. The initial charge is just a means of determining if the account holder's given data is valid information and that the credit limit is authorized. It would be necessary since a dishonest card user not wanting to make a security deposit may give an invalid authorization code or other data. In addition, it is also necessary to place a charge-credit on file with a V-device if an account holder later changes his formula. This procedure allows the merchant the ability of retaining an electronic security deposit without the card user being charged interest or other fees or the account holder's credit limit being lowered. In the event the formula to produce an authorization code is ever changed by the account holder and a charge-credit was prerecorded by a V-device, the old formula is conserved on file at the bank along with the exact time/date range of the formula's existence. So if a vendor, having stored S-P-D-T-A data, needs to later make a charge to the old formula configuration, the bank's record showing a charge-credit record on file may allow the charge to be authorized. This would not breach security to the account holder since a charge-credit record must first show during the old formula's time/range existence for any new charge being made using an earlier formula configuration. So if a thief cracks an earlier formula and decides to try to get funds by using an old formula configuration, not having previously made a charge-credit during said old formula's existence, the charge would not be authorized. In addition, the preferred embodiment of the present invention requires M-L information to be transmitted along with S-P-D-T-A data. Any thief running numbers may be located and investigated. The date/time combination must also match within the life range of a formula, and any formula, to be validated. As a matter of fact, any date/time combination within the formula life range can be validated, even if the current time is different than the received data combination, as long as the other variables of S-P-A also match when a V-device substitutes them in the formula. This allows a merchant to make a charge with the same D-T combination even if an electronic security deposit is withdrawn at a much later date. In addition, it is important to provide some flexibility to a C-device or R-device since not all clocks in the world run at the same pace. Another way to make security deposits is by making several different electronic deposits at different price levels so that a merchant can charge several different fees at predetermined time intervals. This allows a merchant to make an annual fee towards an account holder by taking recorded information all at once. Charges can be made to an account without the cardholder's further permission. This allows great convenience without compromising security measures. Still another use of a C-device may allow the storing and balancing of all purchases made by the authorized user. In use, the C-device can store all purchases made and can automatically deduct from the available credit each time a charge is made. This allows a user to keep track, in a memory, one's own available credit since all purchases are automatically recorded in the form of an "electronic checkbook register". VIII. SAMPLE OPERATION OF PREFERRED EMBODIMENT Today, John gets the C-device he ordered from the bank. The C-device was sent from the bank with an account form showcasing the Serial number that John is required to store into his C-device to activate his account. The Serial number 5432-2101-2345-6789 was printed on the form and sent to John to allow him to enter in this code, whereby cutting the cost of the bank having to engrave a different Serial number, name, and expiration date on every C-device mailed out. John enters his legal name from the received form into the C-device as well. John then stores his self-created secret formula, PIN code, and the PIN code's time preference into the C-device. He calls his bank and establishes his formula F to be D.sup.T +P.sup.D +T.sup.D =A. John sees something he wants in a catalog for $19.99 plus tax and shipping. He calls the merchant and gives the merchant his Serial number, which is the account number 5432-2101 -2345-6789 previously stored in memory of the C-device. The merchant rings up the total to be $24.65 with all charges included. John then turns on his C-device by entering the preset PIN code of 1234567. John enters $24.65 into his C-device and presses enter. The authorization code displays on the C-device's LCD screen so A=2.612471972. John presses enter again and the date and time the code was calculated with shows as Feb. 20, 2000 at 2:21:21 pm. John then gives the merchant his legal name, the time and date displayed on the C-device screen, and the authorization code to be run with the account number. The merchant number M is 654321 and the location number L of the merchant's R-device is 98765. The merchant then manually enters the variables in the order of S-P-D-T-A into his R-device, which is attached to a modem along the internet. The R-device automatically adds the M-L data to the received data during a verification transmission. The entire combination number dials into the verifying V-device at John's bank. The V-device uses the values of the variables and notices that the authorization code 2.612471972 would indeed match for $24.65 on Feb. 20, 2000 at 2:21:21 pm. However, the greedy merchant wants more money. He decides to run the same numbers through again but at a price of $9000! This time however, the V-device notices that at a price of $9000, the authorization code would not be the same, therefore invalidating the authorization code. The merchant tries again to rack up some more money; this time trying to use the exact same combination number. When the V-device receives the same combination number again, it will be invalidated because the verifying device knows that in real time two separate charges cannot be made at once. So once again the greedy merchant tries to guess a code by changing the time, just slightly, with the hope that it will go through. Even changing just one second on the time at 2:21:22 pm, would cause the authorization code to be 2.612469901 instead of 2.612471972. Now the merchant is really mad that the code did not authorize. After another guess at the authorization code, he is prompted that he cannot run that account number at his location for another 24 hours, which was designed to stop hackers from guessing numbers! Three hours later, John decides to go into a store to make a purchase. He brings his merchandise to the counter and the merchant rings up the total to be $120.52. John doesn't need to enter his PIN into the C-device again, because he originally configured it to only require a PIN every six hours during the day to allow himself more shopping convenience. John enters $120.52 into his C-device to get an authorization code, A equaling 2.591797445. John then slides the C-device into the R-device to be read by the reader. Although the merchant tried to be slick and altered the R-device's computer monitor so that $500 being run along a network actually displays as $120.52 on the computer display, the value of $120.52 was still calculated in the formula because P was entered into the actual C-device and not the merchant's sneaky computer display. Furthermore, the computer virus the merchant included into the R-device has no effect to rewrite the C-device's pre stored formula because the C-device was engineered with nonrewritable means and the formula is engineered to be stored along a parallel circuit when being read along the card swipe or electronic signaler. A formula can only be read or altered when information is entered into the numeric keypad by the authorized user. On Feb. 24, 2000, John goes to a store and wants to establish a cellular phone account. The merchant requires a $200 dollar deposit from John. John enters his PIN and price into the C-device and gets an authorization code on the screen. He slides his C-device through the card slot for payment. However, the merchant claims that his R-device didn't get the message because it is broken, so the merchant wants John to use the electronic signal device instead. In reality, John didn't know that the card slot was really working and that the greedy merchant just wants the C-device's clock to change a few seconds so another authorization code can be received by the R-device so that the merchant can double charge him. However, John knows better than this, and presses the "last charge" function on his C-device. The C-device then uses the exact same date, time, and price data so that the crooked merchant cannot receive a second authorization code with the hope of making a double charge. If the merchant runs the exact same data more than once, the V-device will invalidate the second charge because it knows that two charges cannot be allowed with the exact same D-T data. A burglar broke into John's house while he was out shopping. John wasn't that safe and actually left a copy of his secret formula and all of his account information written on a sheet of paper. John thinks that his formula was discovered by the burglar. He calls his bank and changes his formula right away. However, several weeks later John cannot pay his cellular phone bill and the cellular phone merchant needs to withdraw the deposit of $200. The recorded S-P-D-T-A information, being on file with the merchant, are then transmitted to John's bank from the merchant's R-device. Even though the formula was just changed, the merchant had previously made a "check" on the account so the payment is allowed by the V-device. Now it's the burglar's turn to try and fraud John. Fortunately for John, the burglar didn't get the same chance to make charge-credits while John's formula was in-force so withdrawals cannot be made. However, even if the burglar had known about the charge-credit by the cellular phone merchant, the burglar's merchant identification and location numbers of M-L would not allow him to deduct any funds from John's account since he is not that merchant! IX. CONCLUSION Let it be known that none of the prior art references displays a concrete, systematic or convenient method for producing authorization codes without flaws. However, my disclosure and its examples clearly explain: a method of conducting an electronic security transaction without compromising security to the cardholder so that security payments and annual fees may be collected by a company, even after the later changing of a formula by the authorized user. Furthermore, the disclosed method to allow security deposits also shows: (a) a way for banks to inexpensively produce formulas and provide a calculating apparatus with its own built-in internal clock, so that merchants cannot use an authorization code with the same time data more than once on the same day, for a duplicate charge (b) a method of security for preventing a stolen card from being used by the entering of a preset PIN every predetermined time period as established by the authorized user, (c) a method of preventing a scanner from changing or reading a stored formula during a purchase, (d) a method of preventing hackers from guessing authorization codes, (e) a method of allowing security even on distant or phone orders, (f) and a method showing those in the field how to understand and use the present invention. These are among the many advantages that make the present invention novel, unobvious, and patentable over the prior art.
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