Coding formula for verifying checks and credit cards

• US 5,754,653 A
• Filed: 07/26/1995
• Issued: 05/19/1998
• Est. Priority Date: 07/26/1995
• Status: Expired due to Fees

• Current Assignee: Henry A. Canfield
• Original Assignee: Henry A. Canfield
• Inventors: Canfield, Henry A.
• Primary Examiner(s): CANGIALOSI, SALVATORE A
• Application Number:
  US08/506,781
• Time in Patent Office: 1,028 Days
• Field of Search: 380/24, 380/59, 235/380, 235/379, 340/825.34, 283/58
• US Class Current: 705/75
• CPC Class Codes: G06Q 20/042 characterized in that the payment protocol involves at least one cheque
• CPC Class Codes: G06Q 20/401 Transaction verification
• CPC Class Codes: G06Q 20/4012 Verifying personal identification numbers [PIN]
• CPC Class Codes: G07F 7/10 together with a coded signal , e.g. in the form of personal identification information, like personal identification number [PIN] or biometric data
• CPC Class Codes: G07F 7/1066 PIN data being compared to data on card

Abstract

A method is disclosed for verifying that a check user, a credit card holder, or an account user is authorized to complete a transaction. The issuer of the check or credit card or the verifying entity assigns a security code formula to each user, consisting of two variables: a base code number separated into two parts; and one or more arithmetic modes. The authorized user will calculate a verification code number in a two step process using the two parts of the base code and the check number or transaction amount; he then places it on the check or the transaction slip. Verification can be performed by the issuer, who ensures that a correct verification code number has been entered on the check or transaction slip.

Claims

1. A method of verifying that a credit card transaction is being completed by an authorized user of a credit card, comprising the steps of:

a. issuing a credit card to a credit card holder with an account;

b. assigning a security code formula to said credit card holder'"'"'s account and making said formula known to said credit card holder, said formula consisting of two variables, namely;

(1) a constant, multiple-digit numerical base code, said base code being separated into a first part and a second part;

(2) one or more arithmetic modes;

c. upon presentation of said credit card for payment of a transaction, having said credit card holder be informed of a total transaction amount;

d. requiring said credit card holder to calculate a verification code number which is a mathematical result of performing said arithmetic mode upon the transaction amount and the first part of said base code, and then performing said arithmetic mode or a second arithmetic mode upon the result and the second part of said base code;

e. requiring said credit card holder to inscribe said verification code number on a transaction slip and to inscribe any single-digit number or numbers to complete an eight-digit entry;

f. verifying said verification code number by comparing it to the verification code number which would be produced by said security code formula for said account.

2. A method as defined in claim 1, wherein the two variables involved in assigning the security code formula in step b are further defined, so that:

(1) said multiple-digit numerical base code is selected from among numbers containing at least two digits and no more than eight digits; and

(2) said arithmetic modes are selected from multiplication, division, or square root.

3. A method of verifying that a check is being completed by an authorized signatory on an account, comprising the steps of:

a. opening a checking account and issuing checks to an account holder;

b. assigning a security code formula to said account and making said formula known to said account holder, said formula consisting of two variables, namely;

(1) a constant, multiple-digit numerical base code, said base code being separated into a first part and a second part; and

(2) one or more arithmetic modes

c. upon completion of a check, having the account holder ascertain a check number;

d. requiring said account holder to calculate a verification code number, which is a mathematical result of performing said arithmetic mode upon the check number and the first part of said base code, and then performing said arithmetic mode or the second arithmetic mode upon the result and the second part of said base code;

e. requiring said account holder to inscribe said verification code number on said check and to inscribe any single-digit number or numbers to complete an eight-digit entry;

f. upon presentation of said check for payment, verifying said verification code number by comparing it to the verification code number which would be produced by said security code formula for said account.

4. A method as defined in claim 3, wherein the two variables involved in assigning a security code formula in step b are further defined, so that:

(1) said multiple-digit numerical base code is selected from among numbers containing at least two digits and no more than eight digits; and

(2) said arithmetic modes are selected from multiplication, division, or square root.

5. A method of verifying that a commercial check is being completed by both an authorized payor of said commercial check and an authorized payee of said commercial check, comprising the steps of:

a. issuing commercial checks to a payor;

b. assigning a different security code formula to each of said commercial check payor and each payee and making each assigned security code formula known to the commercial check payer and the payee, each said formula consisting of two variables, namely;

(1) a constant, multiple-digit numerical base code, said base code being separated into a first part and a second part; and

(2) one or more arithmetic modes;

c. upon completion of said commercial check, having said payor ascertain a check number;

d. requiring said payor to calculate a payor verification code number, which is a mathematical result of performing said arithmetic mode upon the check number and the first part of payor'"'"'s said base code, and then performing said arithmetic mode or the second arithmetic mode upon the second part of said base code;

e. requiring said payor to inscribe said payor'"'"'s verification code number on a payor verification line on said commercial check and to inscribe any single-digit number or numbers to complete an eight-digit entry;

f. upon receipt of said commercial check, requiring said payee to calculate a payee verification code number, which is a mathematical result of performing said arithmetic mode upon the check number and the first part of payee'"'"'s said base code, and then performing said arithmetic mode or the second arithmetic mode upon the result and the second part of said base code.

g. requiring said payee to inscribe said payee'"'"'s verification code number on a payee verification line on said commercial check and to inscribe any single-digit number or numbers to complete an eight-digit entry;

h. upon presentation of said commercial check for payment, verifying said payor verification code number and said payee verification code number by comparing each to the verification code numbers which would be produced by each of said security code formulas for said payor and for said payee.

6. A method as defined in claim 5, wherein the four variables involved in assigning each security code formula in step b are further defined, so that:

(1) said multiple-digit numerical base code is selected from among numbers containing at least two digits and no more than eight digits; and

(2) said arithmetic mode is selected from multiplication, division or square root.

7. A method of verifying a financial transaction is being completed by an authorized person, comprising the steps of:

a. having an account with an account-holder;

b. assigning a security code formula to said account and making said formula known to said account-holder, said formula consisting of two variables, namely;

(1) a constant, multiple-digit numerical base code; and

(2) square root as a first arithmetic mode, and a second arithmetic mode

c. requiring said account holder to calculate a verification code number, which is a mathematical result of taking the square root of a variable number, and then performing said second arithmetic mode upon the result and said numerical base code;

d. requiring said account holder to inscribe said verification code number on a transaction document and to inscribe any single-digit number or numbers to complete an eight-digit entry;

e. verifying said verification code number by comparing it to the verification code number which would be produced by said security code formula for said account.

8. A method as defined in claim 7, wherein the two variables involved in assigning the security code formula in step b are further defined, so that:

(1) said multiple-digit numerical base code is selected from among numbers containing at least two digits and no more than eight digits; and

(2) said second arithmetic mode is selected from multiplication, division, or square root,

and wherein the variable number described in part c is either a check number or a transaction amount number.

9. A method of verifying that a transaction is being completed by an authorized person, comprising the steps of:

a. opening an account with an account user;

b. assigning a security code formula to said account and making said formula known to said account user, said formula consisting of two variables, namely;

(1) a constant, multiple-digit numerical base code, said base code being separated into a first part and a second part; and

(2) one or more arithmetic modes;

c. upon request for verification of said account users identity, informing said account user of a specific number;

d. requiring said account user to calculate a verification code number, which is a mathematical result of performing said arithmetic mode upon said specific number and the first part of said base code, and then performing said arithmetic mode or the second arithmetic mode upon the result and the second part of said base code;

e. requiring said account user to repeat said verification code number;

f. verifying said verification code number by comparing it to the verification code number which would be produced by said security code formula for said account.

10. A method as defined in claim 9, wherein the two variables involved in assigning a security code formula in step b are further defined, so that:

(1) said multiple-digit numerical base code is selected from among numbers containing at least two digits and no more than eight digits; and

(2) said arithmetic modes are selected from multiplication, division, or square root.