PH boom seen to be a boon for ATM fraudsters
The Philippines is expected to experience a surge in fraud committed against holders of automated teller machine (ATM) and credit cards over the next few years—the downside of having more people involved in the banking system as the country’s economy booms.
In a briefing, officials of financial risk service firm Fico said that international fraud syndicates have focused their efforts on the country in recent years because of the growing number of banking clients, many of whom remain vulnerable to scams because of lack of information.
“Because of the incredible growth of the Philippine market, fraudsters are saying ‘this is where we have to be,’” said Fico country manager Burton Crapps. “The banking system in the Philippines is expected to grow 30 percent year on year over the next five years, and the fraudsters know that. The more ATM cards and credit cards are out there, the greater the opportunity for them to commit fraud.”
Fico, formerly known as Fair, Isaac Corp., is based in the United States and specializes in providing trend and fraud management solutions to banks and finance institutions worldwide.
The company estimates that ATM fraud has grown 50 percent faster over the last three years, and this rate will even accelerate in the coming years.
At present, financial fraud in the Philippines is predominantly about ATM skimming and “card-not-present” operations, according to the Fico official.
ATM fraud involves the installation by fraudsters of a card-reading device on ATMs that will allow them to read bank clients’ data as they undertake transactions, while a hidden camera simultaneously captures personal identification numbers as they are punched onto the ATM keypad.
These are committed by international syndicates based in Asia and Eastern Europe. They capture data from thousands of ATM cards, produce duplicate cards based on the captured information and withdraw the victims’ money overseas.
“The Philippine economy is growing at 6.6 percent annually. Plus, there are a lot of overseas workers sending home more and more funds,” the Fico official said. “The more money that comes into the Philippines, the more we become susceptible.”