Banks, customers and the governments should have a “shared” responsibility in addressing rising ATM card fraud cases in the country, the Bangko Sentral ng Pilipinas (BSP) said over the weekend.
Various modes of ATM fraud include putting a skimming plate on top of keypads to copy personal identification numbers (PIN) of depositors and illegally withdraw money from bank accounts.
ATM fraud also involves placing a card reader with a memory chip, which copies data from the ATM card, and installing a camera to acquire the cardholder’s PIN.
In an e-mail to reporters over the weekend, BSP Governor Amando Tetangco Jr. said that banks tried different solutions to prevent ATM fraud, like using hidden cameras to validate who and when people withdrew from which ATM machine.
However, Tetangco said that it turns out that not all ATM machines have a camera, and people now use hats to cover their faces so cameras have become ineffective.
“Our solution then [from a technology perspective]is the chip-based card to replace the magnetic strip. You cannot ‘skim’ a chip which is physically embedded in a card but not in its replica,” he said.
The BSP governor noted that in August last year, the central bank issued guidelines to strengthen electronic retail payment network and protect against ATM and credit card fraud such as skimming and cloning.
Under the new regulations, the BSP required its supervised institutions to adopt end-to-end Triple Data Encryption Standard (3DES) for the whole ATM network by January 1, 2015, and shift from magnetic stripe technology to more secure EMV chip-enabled cards by January 1, 2017.
EMV, a technology developed by Europay, MasterCard and Visa, uses a chip that contains information needed to use the card for payment, and is protected by various security features.
The BSP said that about 1,272 incidents of ATM fraud took place last year involving about P220 million, which was well above the recorded P175 million lost to scams in 2012.
“This kind of loss should be approached as a ‘shared’ responsibility. Banks are required to take all prudent measures to minimize the risk. Customers should be careful in handling their ATM cards,” Tetangco said.
“Police authorities should be running hard after the criminal syndicates. Without these in place, insurance will be a costly and counter-productive proposition. Customers will ultimately bear the ‘cost’ either in higher fees or more restrictive services,” he added.