Fraudulent Actives on ATM Services and Cards: Bangladesh Perspectives

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Fraudulent Actives on ATM Services and
CardsBangladesh Perspectives

• Prof. Muhammad Mahboob Ali, PhD
• Macro and Financial Economist
• pipulbd_at_gmail.com
• Cell8801911394704

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• As cards give one flexible access to the money,
  so gradually it becomes popular in Bangladesh.
• Some banks offer an ATM card that allows one to
  withdraw money from the account, but only through
  an ATM machine. Unlike debit cards, ATM cards do
  not have the Visa or MasterCard logo .
• ATM cards give easy access to money, but
  might cost one.
• As per news report (14-02-16) more than 9 million
  cards have been issued to clients by banks in
  Bangladesh, of which 8.5 million are debit cards.

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• National Payment Switch Bangladesh
• ATM
• POS
• Internet
• Mobile Device
• WAY4 software from Open Way Group
• Platform Powers the National Payment Switch of
  Bangladesh

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• Methodology
• Survey Made from 1st March 2016 to 5th May,2016
• Random Sampling
• Total no. of Banks12
• Total no. of ATM situated were visited121
• Customers answered 324
• Male201 remaining female
• Service providers of different banks172
  personnel

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• Fraudulent Activities Global perspectives
• IBM through its study indicates that on an
  average in the Globe around 80 Million US Dollar
  losses. In USA through debit and credit care 2.4
  billion USD losses per annum. As such IBM in 2011
  suggested for Machine learning, Stream computing
  and virtual detectives.
• Stream analytics detects anomalies, transforms
  incoming data, triggers an alert when a specific
  error or condition appears in the stream, and
  displays this real-time data in the dashboard.

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Stream analytics detects anomalies
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• Types of ATM Machines
• Freestanding ATM
• Countertop ATM
• Built-in ATM
• Dial-up ATM
• Wireless ATM

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• ATM Machine Sample Costs
• Generally, ATM machines cost anywhere from
  around 1,000 up to 25,000 
• Freestanding ATM machine costs 3,500 to 7,000 
  
• A built-in/through-the-wall ATM machine costs
  roughly 5,000 to 10,000 
• An ATM machine without a dispenser and cassette
  costs around 1,250 to 1,750.
• A freestanding ATM machine with a color LCD,
  1,000 note cassette, thermal receipt printer, and
  dial-up connectivity might cost3,000 to 4,000.
• A built-in/through-the-wall ATM machine with a
  monochrome LCD, thermal receipt printer, 2,000
  note cassette, and wireless capability costs
  around 6,000 to 9,000.
• Customers nationwide report paying an average
  of 2,000 to 4,000 for an ATM machine.
• Additional ATM costs might include
• A phone line

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• NCR warns
• About skimming attacks
• Through keypad overlays
• Hidden cameras
• Skimming devices plugged into the ATM network
  cables to intercept customer card data.
• ATM network cables and intercept customer card
  data. Additional devices are attached to the ATM
  to capture the PIN
• A keyboard overlay was used to attack an NCR ATM,
  through a concealed camera and
• PIN data -transmitted wirelessly to the skimming
  device.
• Processor Breach
• In 2012 through Breach of Processor some10
  million credit cards were hacked.
• Hacked Point of Sale service company/vender

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Triton FT5000 Series ATM Machine 7,195.00
9,770.00 Triton Traverse Series ATM
Machine 2,879.00 7,144.00
Problem lies importer of ATM machines do not like
to give proper Tax.
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• In February 12, 2016 .
• Eastern Bank Ltd. (4 Booths)
• United Commercial Bank Ltd. (1 Booth)
• The City Bank Ltd. (1 Booth)
• 6 ATM booths of 3 banks of Bangladesh

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• A foreigner Peter has been arrested along with
  three Bangladeshi banker in connection with
  recent cases of ATM fraud in Bangladesh.
• Hotel owner Hasnat arrested in ATM scam on 5th
  April, 2016 for doing 140 transactions to
  withdraw a little over Tk. 32 million using the
  terminal between Jun 8 and Jul 31, 2015.
• Police informed that there were 22 or 23 other
  high-profile individuals involved in the scam.
  Some helped Peter by providing information,
  while some allowed him to directly use their POS
  machines as said by High police official.

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• The First quarter of 2015,skimming at US banking
  institutions ATMs increased 173 compare to
  2014.
• ATM at off-premises locations such as convenience
  stores and hotels
• 317()
• However, POS 81.3 (l) during the same period at
  USA by FICO.
• In Bangladesh on the customs intelligence and
  investigation department on 2 March ,2016 seized
  unattended 1,000 counterfeit magnetic cards .Size
  3.370 X 2.125 inches, same as debit and credit
  card

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• A man suspected of committing credit card fraud
  checked into the Fox Tower hotel ,USA on 15th
  Janaury,2016 under the name Anthony Ortiz. During
  the investigation, officers also located a
  machine that makes credit cards, a laptop
  computer, two counterfeit 100 bills, 20
  fraudulent credit cards and 20 bags of heroin,
  police said.
• The attackers will have a higher success rate
  using cloned, physical cards rather than using
  cards online
• Installing malicious software
• Counterfeit cards

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• The move comes after fraudulent cash transactions
  in Bangladesh were detected at six ATM booths of
  three banks on 12 Februayr,2016 for 25 Lac taka.
• Fraudsters took out cash from 21 cardholders by
  hacking their personal identification numbers
  (PIN) by installing skimming devices at six ATM
  booths in the city, according to the BB.
• Bangladesh Bank said it is working to repay the
  money the cardholders lost as a result of the
  fraud . Three Banks tried to compensate but all
  fraudulent activities not come to the knowledge.
• The PIN is not printed or embedded on the card
  but is manually entered by the cardholder during
  ATM transactions.
• This indicates lapses from the banking side as
  they do not monitor the video footage regularly

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• Q-Cash has 43 banks and financial institutions as
  its clients, meaning that cardholders of these
  banks can use Q-Cash ATM booths for transactions.
• ReadyCash has the largest network of cash
  withdrawal points of any card in Bangladesh. The
  micro-processor chip (a mini computer) on the
  card makes the card highly resistant to
  unauthorized use. A PIN (Personal Identification
  Number) is needed to authorize each transaction.
  A photograph of the cardholder also provides
  security and also acts as a proof of identity.

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• EMV means
• Enhanced Motion vehicle
• Euro pay , Master, Visa(Card related)
• In 2014-NCR at ANZ Australia-deployed -1st
  Global EMV contactless ATM(prevented skimming and
  mobile payments)
• Diebold announced card less ATM pilot with Citi
  babk and America First credit union and Banco
  Popular de
• But the fraudsters may be able to enroll for the
  ATM app using a stolen identity
• Financial institutions across the USA-Card free
  ATMs to eliminate fraud losses

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• ProblemsHuman resource is inadequate
• Infrastructure is not properly developed
• Weak Governance
• Some Officials are not doing their responsibility
  properly
• Poor security
• Lack of monitoring
• High rate of interest against credit card

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• Greediness among the service providers including
  Bankers, merchants and POS owners
• Malicious software
• Overdependence on vendors-local and foreign
• Video Surveillance camera some times does not
  work or even not properly monitor

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• RecommendationsImporters of ATM machine should
  give proper taxes NBR should check the
  International price with the quotation
• Banks should not use stolen ATM machine
• Customer should report fraud as early as
  possible
• ATMs at retail stores or restaurants are more
  venerable
• In the card division regular employee should be
  deployed
• Contractual job of sales and marketing team of
  credit card should be replaced by regular
  employees
• 24 Hours Video surveillance camera should be
  monitored at back office
• Awareness, paying attention and understanding
  risks

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• Bank should increase manpower in IT sector with
  proper training
• Regular visit in the place of ATM by bank
  personnel must be ensured
• Bangladesh Bank should act as more pro active
  role so that commercial banks must obey the
  circulars and follow the guide lines with due
  diligence

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• In Bangladesh Bank a separate full fledged
  Department of ATM and Card division should be
  established
• IT security facility should be arranged
• Self-managed IT system with Hardware, Netware
  ,software and Human ware should be arranged
• Anti skimming system should be more tightening
  the belt.24-hour dedicated team that monitors and
  identifies suspicious transactions
• More spending on security measures are being
  required at least 10 of total infrastructural
  cost

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• All ATM should be set up with round the clock
  video surveillance . Pin pad protector, key pad
  protector should be kept secret so that it cannot
  be easily understandable by single employee of
  the bank with giving security Layer to entire in
  the process
• One time password may be arranged for transaction
  ensuring PIN for single operation
• Those who are doing such heinous crime they must
  be bring under trial and punishment without
  delay

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• Conclusion
• EAST has joined forces with the Latin American
  Association of Operators Electronic Funds
  Transfer and Information Services (ATEFI) in
  order to further strengthen cross border
  cooperation in combating all types of payment
  crime including payment card fraud, hi-tech crime
  and ATM cyber and physical attacks on May,2016.

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• In the modern era, prevention is better than
  cure-so fraud should be stopped.
• One thing-the amount we got reported about fraud
  ,in practice as per a latest economist of the
  country, what is detected - 20 times more happen!