Local banks, law enforcers, and the public need to share the responsibility of keeping bank accounts safe from syndicates that steal money from consumers through the “skimming” of automated teller machine (ATM) cards.
“A skimmed card by itself will not work unless the PIN has also been compromised. So a related issue is how the password is stolen with the skimmed card,” Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said over the weekend.
“This kind of loss should be approached as a ‘shared’ responsibility. Banks are required to take all prudent measures to minimize the risk.”
“Skimming” refers to the practice of cloning an ATM card using special devices. The clone of a real ATM card can then be used to withdraw a depositor’s money without his or her knowledge.
“Customers should be careful in handling their ATM cards. Police authorities should be running hard after the criminal syndicates,” Tetangco said.
Data from last year showed that there were a total of 1,272 reported cases of ATM fraud in 2013. This led to the loss of over P220 million to criminals who prey on depositors’ bank accounts, and raised concerns over the safety of funds held by banks for their clients.
While the use of surveillance cameras have helped reduce cases of fraud, the simple use of a hat would be enough to hide a person’s face from cameras on ATMs, he added.
Senator Grace Poe last month said she would push for new legislation that would require banks to reimburse depositors’ funds lost to thieves.
BSP Deputy Governor Nestor Espenilla Jr. said under current laws, depositors may get reimbursements in cases where the theft is found to have been a result of lapses on the part of banks.
To combat card cloning or skimming, the Bangko Sentral ng Pilipinas (BSP) has mandated banks to ditch the magnetic stripe technology in favor of the EMV chip technology in ATM cards by January 2017.
EMV is a chip-based technology developed by Europay, MasterCard and Visa.
It refers to payment chip cards that contain an embedded microprocessor that provides strong security features and other capabilities not possible with traditional magnetic strip cards, according to www.emvco.com.
According to Jose Villaret Jr., Philippine Deposit Insurance Corp. (PDIC) corporate affairs vice president, banks may choose to offer their clients insurance products for theft-related losses.
The additional cost to consumers, however, may make these insurance plans unattractive to most.
The BSP shared this sentiment, noting that insurance would “be a costly and counter-productive proposition.”
“Customers will ultimately bear the ‘cost’ either in higher fees or more restrictive services,” Tetangco explained. Paolo G. Montecillo