Method for securing information relevant to a transaction

• US 5,974,148 A
• Filed: 05/13/1997
• Issued: 10/26/1999
• Est. Priority Date: 11/17/1992
• Status: Expired due to Term

• Current Assignee: Leon Stambler
• Original Assignee: Leon Stambler
• Inventors: Stambler, Leon
• Primary Examiner(s): CANGIALOSI, SALVATORE A
• Application Number:
  US08/855,561
• Time in Patent Office: 896 Days
• Field of Search: 380/23-35
• US Class Current: 705/75
• CPC Class Codes: G06Q 20/02 involving a neutral party, e.g. certification authority, notary or trusted third party [TTP]
• CPC Class Codes: G06Q 20/347 Passive cards
• CPC Class Codes: G06Q 20/3821 Electronic credentials
• CPC Class Codes: G06Q 20/385 using an alias or single-use codes
• CPC Class Codes: G06Q 20/401 Transaction verification
• CPC Class Codes: G07F 7/08 by coded identity card or credit card or other personal identification means without personal verification means G07F7/02
• 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 7/1016 Devices or methods for securing the PIN and other transaction-data, e.g. by encryption arrangements for secret communication, see H04L9/00
• CPC Class Codes: G07F 7/1066 PIN data being compared to data on card
• CPC Class Codes: G07F 7/12 Card verification
• CPC Class Codes: G07F 7/125 Offline card verification
• CPC Class Codes: G16H 20/10 relating to drugs or medications, e.g. for ensuring correct administration to patients
• CPC Class Codes: H04L 2209/56 Financial cryptography, e.g. electronic payment or e-cash
• CPC Class Codes: H04L 9/3226 using a predetermined code, e.g. password, passphrase or PIN network architectures or network communication protocols for supporting authentication of entities using passwords in a packet data network H04L63/083

Abstract

A transaction system is disclosed wherein, when a transaction, document or thing needs to be authenticated, information associated with one or more of the parties involved is coded together to produce a joint code. This joint code is then utilized to code information relevant to the transaction, document or record, in order to produce a variable authentication number (VAN) at the initiation of the transaction. This VAN is thereafter associated with the transaction and is recorded on the document or thing, along with the original information that was coded. During subsequent stages of the transaction, only parties capable of reconstructing the joint code will be able to uncode the VAN properly in order to re-derive the information. The joint code serves to authenticate the parties, and the comparison of the re-derived information against the information recorded on the document serves to authenticate the accuracy of that information.

Claims

1. A method of transferring funds from a first party to a second party, the method comprising:

creating a variable authentication number (VAN) on a computer using first information and a secret key of the first party, the first information including an amount and information for identifying the first party or the second party, the VAN attesting to the authenticity of the first party and the first information;

creating an instrument by the first party for transferring funds to the second party, the instrument including the first information and the variable authentication number (VAN) and attaching the VAN to the instrument.

2. The method of claim 1 wherein a credential, including a second VAN and a non-secret key of the first party, was previously issued to the first party by an entity authorized to issue a credential, the credential and the second VAN being used by the second party, or a third party, to attest to the non-secret key belonging to the first party, the non-secret key from the credential being disseminated to the second party, or the third party, by joining the credential to the instrument.

3. The method of claim 2 wherein a non-secret key of the credential issuing entity is appended to the credential and is disseminated to the second party, or the third party, the second or third party using the non-secret key of the credential issuing entity, and the second VAN to determine whether the non-secret key of the first party belongs to the first party.

4. The method of claim 1 wherein the secret key is obtained by the first party using a PIN, or using descriptive details, of the first party.

5. The method of claim 1 wherein the VAN is created by the first party using an error detection code (EDC1), and the first information is subsequently authenticated by the second party, or by a third party, the method further comprising:

creating the EDC1 by coding the first information;

creating the VAN by coding the EDC1 using the first party'"'"'s secret key;

the second party, or the third party, subsequently obtaining the instrument and the VAN, and extracting the VAN and first information;

coding the first information to create an error detection code (EDC2);

uncoding the VAN to recover EDC1 using a non-secret key of the first party;

comparing the EDC1 with the EDC2; and

the second party, or the third party, authenticating the first information if EDC1 and EDC2 correspond.

6. The method of claim 1 wherein the form of the instrument is selected from the group comprising paper, plastic and electronic.

7. The method of claim 1 wherein the first information includes information selected from the group comprising the first party'"'"'s name, the first party'"'"'s account number, the first party'"'"'s bank name, the first party'"'"'s bank identification number, the first party'"'"'s routing transit number, the first party'"'"'s error detection code EDC1, the first party'"'"'s variable authentication number (VAN),

the second party'"'"'s name, the second party'"'"'s non-secret key,

an amount, a date, a check control number, a check serial number, a payment instruction and a memo.

8. The method of claim 1 wherein the first information includes a redemption VAN (RVAN) or check control number (CCN), the method further comprising:

using the RVAN or CCN to intercept or reject duplicate instruments by maintaining a list of previously redeemed RVANS or CCNs, and first party names in a storage means located where the funds transfer is processed.

9. The method of claim 1 wherein at least one of the first party or the second party is pre-enrolled and pre-authenticated during enrollment, at least a portion of the enrollment information, including the first party'"'"'s or the second party'"'"'s non-secret key being stored in escrow, or in trust, during enrollment by the credential issuing entity, wherein the credential issuing entity is selected from the group comprising an official, an agency, a bank, and a pre-authorized party.

10. The method of claim 1 wherein the first party and the second party are the same party.

11. The method of claim 1 wherein the availability and sufficiency of the amount of funds in the first party'"'"'s account is verified by the first party'"'"'s bank prior to or after the instrument is issued.

12. The method of claim 1 wherein the first party'"'"'s accounts payable file and the second party'"'"'s accounts receivable file are updated as a result of transferring the funds.

13. The method of claim 1 wherein a redemption VAN (RVAN) is attached to the instrument, the RVAN being created by the second party or an authorizing party, the RVAN indicating that the first information has been authenticated by the second party or by the authorizing party.

14. The method of claim 1 wherein the first information is subsequently authenticated by the second party, or by a third party, the method further comprising:

the second or third party subsequently obtaining the instrument and the VAN and extracting the first information and the VAN,

uncoding the VAN to recover the first information using a non-secret key of the first party,

comparing the recovered first information with the extracted first information, and

authenticating the first information if the result of the comparison is favorable.

15. The method of claim 1 wherein the instrument is selected from the group comprising a personal check, a paycheck, a travel check, a third party check, a bond, a stock certificate, food stamps, wager receipts, and a bank card.

16. A method for using a payment instrument to make a payment, the payment instrument being originated by a payor and made payable to a payee, the method comprising:

creating a variable authentication number (VAN) on a computer using payment information and a secret key of the payor, the payment information including an amount and information for identifying the payee, the VAN being usable for attesting to the authenticity of the payor and the payment information; and

the payor using the payment information and the VAN to create the payment instrument, the payment instrument being used to make the payment.

17. The method of claim 16 wherein a credential including a VAN was previously issued to the payer by a credential issuing entity, a non-secret key being included in the credential, the credential and VAN being used by the payee or the payer'"'"'s bank, to attest to the non-secret key belonging to the payer, the non-secret key of the payer being disseminated to the payee or the payer'"'"'s bank, by joining the credential to the instrument.

18. The method of claim 17 wherein a non-secret key of the credential issuing entity is appended to the credential and is disseminated to the payee or the payer'"'"'s bank, the non-secret key of the credential issuing entity and the VAN of the credential being used to attest to the payer'"'"'s non-secret key belonging to the payer.

19. The method of claim 16 wherein the VAN is created by the payer using an error detection code (EDC1), the payment information being subsequently authenticated by the payee or the payer'"'"'s bank, the method further comprising:

creating the EDC1 by coding the payment information,

creating the VAN by coding the EDC1 using the secret key of the payer,

the payee or the payer'"'"'s bank subsequently obtaining the instrument and extracting the VAN and payment information,

coding the payment information to create an error detection code (EDC2),

uncoding the VAN to recover EDC1 using a non-secret key of the payer,

comparing the EDC1 with the EDC2, and,

the payee or the payer'"'"'s bank authenticating the first information if the EDC1 and the EDC2 correspond.

20. The method of claim 16 wherein the form of the instrument is selected from the group comprising paper, plastic and electronic.

21. The method of claim 16 wherein the instrument is selected from the group comprising a personal check, a paycheck, a travel check, a third party check, a bond, a stock certificate, food stamps, wager receipts, and a bank card.

22. The method of claim 16 wherein the instrument information is selected from the group comprising the payer'"'"'s name, the payer'"'"'s account number, the payer'"'"'s bank name, the payer'"'"'s bank identification number, the payer'"'"'s routing transit number, the payer'"'"'s error detection code EDC1, the payer'"'"'s variable authentication number (VAN),

the payee'"'"'s name, the payee'"'"'s non-secret key,

an amount, a date, a check control number, a check serial number, a payment instruction, and a memo.

23. The method of claim 16 wherein the instrument information includes a redemption VAN (RVAN) or a check control number (CCN), the method further comprising

using the RVAN or CCN to intercept or reject duplicate instruments by maintaining a list of previously redeemed RVANs or CCNs, and names of payers in a storage means located where the payment is processed.

24. The method of claim 16 wherein at least one of the payer or the payee is pre-enrolled and pre-authenticated during enrollment, the enrollment information, and at least the payer'"'"'s or the payee'"'"'s non-secret key being stored in escrow, or in trust, during enrollment by the credential issuing entity, wherein the credential issuing entity is selected from the group comprising an official, an agency, a bank, and a pre-authorized party.

25. The method of claim 16 wherein the payer and the payee are the same party.

26. The method of claim 16 wherein the availability and sufficiency of the amount of funds in the payer'"'"'s account is verified by the payer'"'"'s bank prior to or after the instrument is issued.

27. The method of claim 16 wherein a redemption VAN (RVAN) is attached to the instrument, the RVAN being created by the payee or the payer'"'"'s bank, the RVAN indicating that the first information has been authenticated by the payee, or by the payer'"'"'s bank.

28. A payment method, comprising:

a payer obtaining a document containing document information, the document information being associated with a debt incurred by the payer or for goods or for services to be paid for or purchased by the payor;

the payer creating a variable authentication number (VAN) on a computer using at least a portion of the document information, and a secret key of the payor, the document information including an amount, and information for identifying the payee, the VAN being used for attesting to the authenticity of the payor and document information; and

the payor creating a payment instrument using the document information and appending the VAN to the payment instrument, the payment instrument being used to pay for the incurred debt or for the purchase of goods or services.

29. The method of claim 28 wherein at least a portion of the document information comprises billing information or purchase information, the billing information or purchase information being attached to the instrument when payment is made.

30. The method of claim 29 further comprising:

creating a second variable authentication number (VAN2) by using at least a portion of the billing or purchase information and the secret key of the payer, and

appending the VAN2 to the document information.

31. The method of claim 28 wherein the form of the document is selected from the group comprising paper, plastic and electronic.

32. The method of claim 28 wherein the document information is selected from the group comprising a bill, information associated with a debt,

a non-secret key of the document originator, a variable authentication number (VAN) of the originator,

software, tickets, data, text, a FAX message, recorded audio or video, a drawing, an image, a photo, electronic mail, physical mail, a medical prescription, motor vehicle registrations, social security cards, passports, birth certificates, identification cards and personal storage media.

33. The method of claim 28 wherein the document is selected from the group comprising a bill and a purchase document.

34. A funds transfer method comprising:

a first party creating an instrument for transferring funds to a second party, the adequacy of the funds in the first party'"'"'s account being verified after the instrument is issued;

using a computer to create a variable authentication number (VAN), the VAN being created using at least a secret key of the first party; and

including the VAN with the instrument for subsequent use in attesting to the authenticity of the instrument.

35. A funds transfer method comprising:

an originator party creating an instrument for transferring funds to a recipient party, the instrument information comprising (i) a variable authentication number (VAN), and (ii) one or more pieces of payment information including an amount, information for identifying the recipient party or the originator party, a date, and a check control or serial number;

creating an error detection code (EDC1) by coding one or more pieces of the payment information; and

creating the VAN on a computer by coding the EDC1 using a secret key of the originator, the originator'"'"'s VAN being usable to determine the authenticity of the one or more pieces of payment information.