Abstract: A cryptography-based entity authentication device (EAD) operated by a remote entity located at a subscriber site enables a telephone switch or computer system to identify and verify the authenticity of the entity. In one embodiment, the EAD encrypts a random digital sequence transmitted by a host facility and returns the encrypted signal to the host for comparison with another encryption signal generated locally by the host. If a match is detected, this serves as confirmation that the remote entity possesses the same encryption key as the host, therefore verifying the authenticity of the remote entity. Otherwise, the entity is deemed fraudulent and access is denied. In another embodiment, the host and subscriber site each include a respective time generation means which are maintained in relative time synchronicity. The EAD generates and encrypts a time signal for comparison with another encrypted time signal generated locally by the host.