ATM fraud on the rise
KATHMANDU, MAR 27:
Police on Sunday arrested a racket involving three Indian nationals from Mahendranagar for withdrawing cash illegally from ATM s using fake debit cards. While the police have started investigation, banks concerned are stunned how the fraudsters got access to the clients’ data ( ATM pin codes).
Around three months ago, millions of rupees were stolen from depositors’ accounts at Himalayan Bank Limited (HBL) in another debit card fraud. After the incident, HBL blocked the use of its debit cards for a few days and distributed new pin codes.
A customer having an account with a leading commercial bank complained of having lost money from his account. It was later found that an employee at the bank’s card division had secretly carbon copied the PIN code while printing it. The bank provided compensation to the customer and took action against the employee. To prevent from such incidents in future, the bank has now installed a CCTV camera at the place where PIN codes are printed.
The first two incidents were widely reported in the media, but the third one got little coverage. However, these three incidents show banking frauds carried out through ATM s are on the rise.
According to the Central Investigation Bureau (CIB) of Nepal Police, the number of such banking fraud cases has increased lately. “The CIB received over half dozen such complaints from banks in the last four-five months,” said SSP Uttam Bahadur Karki, who heads the financial crime pillar at CIB.
With the rise in the number of debit/credit card users, fraudsters are increasingly eyeing the plastic money. As of mid-February, there are 3.02 million card users — 2.99 million debit card holders and 33,868 credit card holders. Such incidents call for adoption of better security measures by banks as well as the regulator, the Nepal Rastra Bank (NRB).
According to SSP Karki, the CIB, a couple of months ago, also dealt with Nepal Investment Bank Limited’s (NIBL) complaint on “phishing”, a technique adopted to acquire secret client information by creating a fake website resembling to the bank’s original website and communicating with clients and staff.
Such “sophisticated” technology-based crimes, however, cannot be controlled by the CIB’s lone efforts, the police said. “Our job, under given circumstances, is just to investigate after a complaint is registered,” he said. “Banks themselves have to find ways to rid off these existing challenges.”
NRB Spokesperson Bhaskar Mani Gnawali said banks and financial institutions (BFIs) should strengthen their information-technology system to minimise such risks. “Fraud cases through ATM s can be minimised if BFIs follow the central bank directives strictly and strengthen their systems,” he said.
Nepal Bankers Association Vice President Upendra Poudel said such incidents can be resolved if BFIs’ internal control mechanism is strengthened. “All responsibilities shouldn’t be given to one individual. There will be fewer problems if we install a check-and-balance mechanism,” he said.
With technological development, it is natural to see such kinds of frauds, but technologies to prevent such incidents are also coming. “It was proved by Nepal Investment Bank Limited, which investigated and trapped the racket itself,” he said.
Source: ekantipur
