BSP reminds banks to help prevent ATM fraud

The Bangko Sentral ng Pilipinas on Sunday called on banks to be one with consumers and the government in minimizing the risks of people losing their hard-earned money due to the skimming of ATM cards.

 

"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. [And] police authorities should be running hard after the criminal syndicates," Bangko Sentral Governor Amando Tetangco Jr. said in an e-mailed statement.

 

"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," Tetangco added.

 

Tetangco’s statements came two weeks after Senator Grace Poe made a similar call. 

 

Poe earlier held a Senate committee hearing on ATM fraud with representatives from the Bangko Sentral ng Pilipinas and from commercial banks. 

 

She said banks already have processes in place for when a client claims ATM fraud.

 

In his statement, Tetangco also raised the issue of how passwords to access the ATM cards are acquired by theives.

 

Tetangco said a skimmed card by itself will not work unless the PIN has also been compromised.

 

“A related issue is how the password is stolen with the skimmed card," he said, adding that the solution of a hidden camera is no longer foolproof. 

 

In the past, he said through the use of a hidden camera, banks could check who and when people withdrew money from which ATM machine.

 

"It turns out that not all ATM machines have the camera. A machine normally has a 10-year life and legacy machines still operating don't have the camera. But more importantly, people now use hats to cover their faces so the camera has become ineffective," he said.

 

Chip cards

 

Tetangco said he believes the ultimate long term solution to the problem of skimmed cards is to embed chips in them, similar to the technology used in credit cards.

 

"You cannot 'skim' a chip which is physically embedded in a card but not in its replica," he said.

 

In August last year, the BSP issued guidelines to strengthen electronic retail payment network and protect against ATM and credit card fraud---including skimming and cloning.

 

Under the new regulations, the bank regulator required its supervised institutions to adopt end-to-end Triple Data Encryption Standard (3DES) for the whole ATM network by Jan. 1, 2015, and shift from magnetic stripe technology to more secure EMV chip-enabled cards by

Jan. 1, 2017.

 

The BSP also earlier said that banks could implement the use of EMV chip cards for their customers even ahead of the mandatory schedule of Jan. 1, 2017.

 

EMV-enabled cards were named for developers Europay, MasterCard and Visa. These cards have an embedded microprocessor chip that encrypts transaction data differently for each purpose. — Patricia Denise Chiu/JDS, GMA News