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| Nice ATM (Photo credit: Wikipedia) |
Financial IQ Philippines Quick Hit(s):
Exercise caution when withdrawing money via ATMs. It is best to use ATMs on banks that are quite secured.
People withdrawing money from automated teller machines (ATM) are instinctively on their guard against anyone peeping from behind and seeing their bank details.
What they don’t know is that the threat may have been in front of them all along.
Millions of pesos have been lost by customers of domestic banks to an international syndicate that specializes in duplicating the cards—and capturing the personal identification number (PIN)—of unsuspecting ATM cardholders, according to banking industry executives.
In an interview with the Inquirer, the bank officials revealed details of a massive “card-skimming” operation that they said was first observed in 2011 and had gradually peaked toward the end of 2012.
The problem became so widespread that the three main ATM networks operating in the country—Expressnet, Megalink and Bancnet—joined forces late last year and agreed to jointly implement measures to combat the scam.
Some banks have voluntarily recalled the ATM cards of clients whose accounts were suspected to have been compromised and replaced them with new cards
An official of the Expressnet ATM network said that investigations initiated by the local banking industry all point to an international organized crime network aided by locals.
“Based on our investigations, these activities were traced abroad to some Taiwanese, Malaysians, Sri Lankans and even Bulgarians,” said Mike Bernabe, the Expressnet vice president for operations.
Using the information captured by the illegally installed card readers from the ATM cards, the syndicates are able to make balance inquiries and know exactly how much to withdraw. Most accounts are cleaned out within hours via multiple withdrawals, since the syndicates also know the transaction limits for each account.
According to Pascual Garcia III, president of Philippine Savings Bank (PSBank), one of the country’s largest savings banks, the industry first became aware of the syndicates’ modus operandi in late 2011.
“Now we have deliberate measures to control that. One is by installing covers on ATM keypads to prevent [the syndicates] from being able to take videos of the passwords [when executing the keystrokes],” he said.
In an effort to get in front of the problem, local banks and their ATM networks have implemented measures to help prevent card-skimming.
"We are now installing what we call fraud-detection inhibitors,” said Expressnet’s Bernabe. “This is the green plastic device you see on the ATM machine which prevents the installation of a card reader.”
He said the three ATM networks have also agreed to install “PIN shields” on their machines which are basically contraptions meant to cover the keypad from any video recording device that could be installed around the ATM.
Bernabe also pointed out that some banks have made it a practice to deactivate the international interconnectivity of the ATM cards they issue to prevent fraud. Instead of cards being automatically activated for use abroad, some clients now have to specifically ask their banks to activate this feature before they travel abroad.
http://business.inquirer.net/106777/intl-atm-scam-bared
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