Lower ATM withdrawal limits to fight fraud?

Ayee Macaraig
In 2013, the Bangko Sentral ng Pilipinas got 1,272 reports of ATM fraud from banks, amounting to close to P220 million

FAKE PIN PAD. The PNP presents this sample "PIN pad overlay" that syndicates install on top of ATM pin pads to record consumers' PIN with a chip. Photo by Ayee Macaraig/Rappler

MANILA, Philippines – Will banks lower the daily withdrawal limit in automated teller machines (ATMs) to help fight scams and fraud?

A bank official told the Senate public order committee that this is one of the steps banks are studying so their depositors will not fall victim to syndicates.

In a Senate hearing on theft cases involving ATMs on Wednesday, February 26, BancNet vice president for operations Rene Natividad said fraudsters take advantage of the daily ATM withdrawal limits.

Natividad said fraudsters usually operate at night, knowing that the bank limits take effect at midnight.

“They know that at 12 midnight, the bank limit will change. So let’s say a bank has P20,000 withdrawal limit for a day. If I go there and I have a cloned card, I can do a transaction at 11:30 pm. I will withdraw P20,000. After midnight, I can do another P20,000 so if the bank allows more limit, there is a higher exposure.

“That’s why banks now are probably thinking of limiting the limits on ATMS,” he said.

The remark prompted committee chairperson Senator Grace Poe to say, “Huwag naman, sir, kasi alam mo ang mahal ng bilihin. Siguro may option na lang na ganoon.” (Please don’t do that, sir, because goods are so expensive. Perhaps just add an option for that.)

Natividad later clarified to reporters that the move is just a precautionary measure, and will depend on the initiative of individual banks.

“This is still being studied. Even if they set a limit, the client can request for an increase in limit. That can be done, an individual request,” he said.

The committee is investigating ways to fight ATM fraud after Senator Miriam Defensor Santiago filed a resolution expressing concern about the “reported increasing ingenuity and sophistication of scams and fraudulent acts” against ATM users.

Vicente de Villa III of the Bangko Sentral ng Pilipinas (BSP) said that in 2013, the central bank got 1,272 reports of ATM fraud from banks. He said this amounted to close to P220 million.

In 2012, the BSP got 1,600 reports of ATM fraud worth P175 million.

De Villa, BSP’s director for Supervisory Data Center, said the cases of ATM fraud represented a “low percentage” of the total 45 million total deposit accounts nationwide

‘Shift to EMV chip by 2017’

BSP and officials from BancNet and the Bank of the Philippine Islands said they noticed a decrease in the number of ATM fraud cases after banks adopted measures against scams like PIN shields, anti-scheming devices, and awareness campaigns.

The Philippine National Police (PNP) presented the modus operandi syndicates use, like card skimming or capturing data from the magnetic stripe at the back of an ATM card. Chief Inspector Jay Guillermo of the PNP Anti-Cybercrime Group said skimming is a worldwide problem.

Syndicates install devices on ATMs like specialized scanners, hidden cameras, cloning devices, and glued traps. The PNP also presented to Poe a sample “PIN pad overlay” that syndicates put on top of the ATM PIN pad to record the keyed in PIN with a chip.

BSP’s Raymond Estioko said the Central Bank already issued a circular requiring banks to shift from the ATM magnetic stripe to the EMV or Europay, MasterCard and Visa chip by January 2017.

“Because magnetic stripe is vulnerable technology compared to the EMV chip base, which is more dynamic. The difference is the information on the magnetic stripe is static, permanent, and easy to copy. In the EMV chip, there’s a computer and a card reader, there’s an algorithm being computed,” Estioko explained.

The PNP’s cybercrime unit is in charge of monitoring the sale of ATM information online but Guillermo told the committee that it has only 8 members.

Expressing surprise, Poe asked the PNP to submit a position paper stating its personnel and budgetary needs.

“Our countrymen really need that. We all get nervous if we are not able to get money. The ATM is really important. I want police to do their jobs properly but you can’t do that if cybercrime unit doesn’t have enough manpower, budget,” the senator said.

Poe also directed the PNP to suggest how it can better work with the Bureau of Immigration to stop fraudsters from fleeing the Philippines.

How to detect ATM fraud 

BancNet’s Natividad gave the following tips for consumers to detect ATM fraud:

  • Check if any of the ATM devices is moveable. If it is, it is likely a gadget for fraud.
  • The following should be checked: card reader, cash dispenser, PIN pad, lighting on top of ATM where cameras may be installed.
  • Report cases of ATM fraud to your bank.
  • Withdraw money from a “familiar” ATM. 

The following slides from the PNP show samples of ATM fraud devices and how to detect scams:



– Rappler.com


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