Our ATM And The Fraudstars

When the Automated Teller Machine (ATM) was introduced in Nigeria a few years ago many Nigerians enthusiastically embraced it. It was really a relief to know that in minutes you get your money without waiting in long queues. The ATM innovation was highly commended by Nigerians as it eliminates human bureaucracy and unnecessary waste of time. Many were particularly excited as it indicated that we were tending towards a cashless society.

Unfortunately, like most laudable ventures, it has been hijacked by miscreants who now turned the ATM system into a nightmare. By the acts of these criminals, the gains have paled into insignificance when compared with the losses experienced by innocent citizens. The novelty of the ATM system wore off speedily as many Nigerians count their losses.

Initially, the incidences witnessed were glossed over as part of the teething problems of e-payment system newly introduced to the Nigerian economy. But rather than reduced it increased daily as Nigerians discovered their deposits stolen by fraudsters. Special Fraud Unit (SFU) confirmed that ATM fraud is on the increase. The astronomical increase has been confirmed by the Central Bank which puts the losses to ATM related theft last year alone at hundreds of millions of naira. It is one of the major problems faced by bank in Nigeria and Inter Switch Limited the ATM Company in Nigeria.

It is regrettable that the ATM technology designed for the convenience of the customers and banks is causing discomfort for users and detracting from the credibility of the banks. A relationship that is meant to be based on trust is now characterised by mistrust and suspicion. It is ironical that people lose their deposits in the same place they took them for safe keeping.

Banks have on their part, persistently warned customers to maintain security of their Personal Identification Numbers (PIN) through advertisements, internal messages and other forms of communication. They claim that customers’ accounts could be tampered with only if they disclose their PINs to other parties. This is why, on most occasions, bank staff allege negligence on the part of the customers. Interswitch also has run public service announcements warning account holders to always be careful when using their ATM cards. Card users are warned not to disclose their PIN and report loss of card immediately.

It is frustrating to know that apart from the “shoulder surfing” technique where the fraudster memorises the PIN of a person using the machine as it is keyed in, there are other means they use to defraud people and even make the ATM dispense more money. It is shameful that Nigerians are reputed to be experts in the forgery of ATM cards that work like master keys.

These criminals, who are prodigiously talented in their act, sometime successfully duplicated the website of interswitch in an ingenious bid to gain access into bank customers’ accounts. They created a mirror website and sent scan messages to card users asking them to register their card details in the cloned site. They claimed Interswitch was upgrading its network. These criminals collected the card details of those who fell and accessed their accounts. In some cases, they unconscionably denied owners access to their accounts by changing the PINs.

In some cases, a skimmer, that is, a card reading device is installed on the ATM to harvest the card numbers and PINs of unsuspecting users. The skimmer is disguised to look like normal ATM equipment. It is mounted in front of the normal card slot that reads the information in the ATM card. At the same time, a miniature camera is disguised to look like a leaflet holder and is mounted in a position to view ATM PIN.

Banks and Interswitch have employed various measures to unmask the perpetrators of this fraud to put an end to this menace all to no avail. More to the chagrin of ATM users, Interswitch, the electronic transaction switching and payment processing company patronised by the banks for inter-bank connectivity, say that ATM fraud is not their liability because the accounts are not wired to them. They claim that there is to ensure that transactions are smooth irrespective of the bank used. They say issues of money lost in the course of ATM use should be sorted out between the banks and customers.

The rise in ATM fraud level is indeed threatening the continual usage of the ATM as more customers are refusing to take advantage of the service. Some have even suggested that banks stop issuing ATM cards if they can not handle the attendant problems and losses. There are customers that were irked to the point of closing their accounts. The ATM system have been alleged to be highly porous and easy to hack into.

Consequent upon the foregoing, it has become imperative that something be done to make ATM safe, secure and risk free. Banks and Interswitch should device ways and means of reducing  this evil significantly. Tips should also be sought from developed nations on how they handle frauds of this nature.

Nigerians are still hopeful as most banks have heed to the order of the CBN that  they move from the magnetic stripe protected ATM cards to a more advanced ATM card protected with electronic chip. Banks have now stopped the issuance of the current ATM card which is susceptible to cloning. The micro chip based ATM card is described as a more intelligent device and difficult to clone. Experts believe that a quick migration by ATM users and maintenance of the secrecy of PIN by customers could provide a lasting solution to the menace of ATM fraud in Nigeria.

There is no gain saying that the advent of the ATM has helped to encourage and deepen banking culture in Nigeria. It is also, highly beneficial in emergencies, not to mention convenience. The enthusiasm displayed by many Nigerians for the electronic cash payment system is quite encouraging. This should not be allowed to wane by fraud in the payment system. All stakeholders should join hands to ensure the sustainability of this technology which is obviously of immense benefit.

Mercy Oke-Chinda