Theft In ATM machine increased

Rise in ATM theft overwhelms banks
>Escalation of ATM thefts is overwhelming commercial banks in the country which are increasingly

Dar es Salaam. Escalation of ATM thefts is overwhelming commercial banks in the country which are increasingly finding it difficult to cope with huge requests to compensate hundreds of victims of the electronic fraud.

Inquiries by The Citizen on Saturday shows that banks are still struggling to come up with an effective solution to the problem that has put depositors in fear of attack as vulnerability widens.

This failure of the banks to change things around despite several measures to enhance their risk management process has made them more susceptible to card skimming.

And months that the banks are taking to compensate victims of ATM theft is another frustrating side of this crime for depositors who have fallen victim of the theft across the country.

Mainstream banks -- NBC, Standard Chartered, CRDB, NMB and Barclays—are losing hundreds of millions of shillings in ATM card skimming and their customers are worried on the fate of their deposits.

Banks are not ready to reveal how much they lose in ATM fraud despite written requests being sent to them, but according to some reports banks have in the past few years been made to spend over a billion shillings in compensations.

Mr Anthon Mwangake, who banks with CRDB Bank in Kahama, Shinyanga lost Sh139,000 a month ago in ATM skimming. At around 10:40pm he received an sms alert that his ATM card has been used to draw the amount.

The next morning, while at the bank to register his case came three other people with similar complaints.

Although Mr Mwangake was refunded the money in less than 45 days he was told to wait. He is losing faith with banks.

“I’m not confident with with the security system in our banks. I suspect inside these banks could be some culprits,” Antony told The Citizen on Saturday.

Mr Mwangake, however, is just among the few lucky ones who got refunded in such a short period of time. Most victims have endured months of going up and down in banks’ corridors to pursue refund.

It was not that easy for a city resident, Mr Adam Gwankaja, whose 1.7 million was stolen from his Standard Chartered Bank account in five different transactions last Saturday.

“I tried to contact the call centre at the bank without response. The best thing I could do was to transfer the remaining money into M-Pesa to avoid further theft,” he says.

“The situation is so bad for us depositors. We are so vulnerable to ATM attacks today than ever before,” he says.

The bank has told him to wait 45 working days to investigate and process his refund.

Another Standard Chartered client who lost Sh2.7 million last  August in similar style, Mr Barnabas Mkwayu, complained he has endured four months of following up refund in vain.

He said he was told by the bank that the process was taking long because his money was withdrawn from an ATM though VISA that’s why the process was taking long because it has to involve other banks in investigations.

Head of investigations at one bank who preferred anonymity because he is not authorised to speak for the bank has confided to this paper that it was taking too long to compensate victims of ATM fraud because the banks are overwhelmed by escalating incidents.

“Delay in refund is because we are overwhelmed by ATM theft cases. We need enough time to investigate each particular case before we can endorse refund,” he said.

The problem of ATM fraud is on the rise whereby a task force was formed early last year to address the problem.

Last year, Bank of Tanzania (BoT) teamed up with Tanzania Bankers Association (TBA), Tanzania Communications Regulatory Authority (TCRA), Financial Crime Unit and Cyber Crime Unit to study escalating incidents of ATM theft and recommend ways of taming the crime.

It is also understood that the BoT had also directed commercial banks to take several measures to curb ATM theft including carrying out awareness programmes on the safe use of the machines, including careful and handling of sensitive details such as Personal Identification Number (PIN) to protect their accounts against unauthorized access.

Yesterday, BoT governor Benno Ndulu said the task force was still working to end the problem and did not fall short of directing commercial banks to implement directives issued by the central bank to control ATM theft.

“We are advising banks to issue their customers with chip-and-pin ATM cards which are technologically highly secured,” said the governor.

He said banks must sensitize their customers on the risks of disclosing information such as their PINs to other people.