ATM withdrawals limited amid fraud reports

Bank customers throughout the UAE have seen their cash withdrawal limits at ATMs slashed amidst reports of suspected fraud.

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By  Massoud Derhally Published  June 2, 2003

Bank customers throughout the UAE have seen their cash withdrawal limits at ATMs slashed amidst reports of suspected fraud.

The UAE Central Bank which did not issue an immediate public notification regarding the fraud, later said in a statement on June 4, that "losses incurred by banks operating in the UAE as a result of this fraud were fairly limited, so far not even reaching Dhs 1.5 million."

But on June 1, Agence France Presse (AFP) said, "The exact amount that has been siphoned off through ATMs is not known but senior bankers believe it could be well over 50 million Dhs ($13.7 million dollars)."

The Central Bank instructed banks in the UAE to take safety precautions by limiting the amount customers are able to withdraw from ATMs.

“There are certain fraudulent mishaps which have been taking place all over the banks in the UAE, due to which, a decision has been taken temporarily for banks to reduce the withdrawal limit to Dhs 1000 a day,” said a customer service officer at Citibank.

“The Central Bank is ordering each of the banks to have this done as a safety measure,” she added.

According to the Citibank officer, the fraud took place on Thursday and Friday, May 29-30. It is widely believed the fraud is being carried out by what is referred to as “white plastic”.

A senior banker at Citibank told Arabian Business there are various ways of committing the fraud at ATMs. “Someone could put a camera in the ATM lobby and that camera is able to zoom in on the person punching in their pin or someone could use a white card,” said the banker.

“The use of white cards means that if you use an ATM card, and the person immediately next to you puts a white card in the machine, the card could be programmed to read your password and the numbers keyed last. The white card really acts like a master key just like every hotel has a master key.”

"It seems that a gang of computer professionals has managed to insert an electronic reader into the card opening of a number of ATMs, which enabled them to copy data of some ATM cards on bank customers," said the Central Bank statement. The statement added, "At the same time, they were able to photograph the customer's hand through a small video camera mounted above the ATM to obtain the customer's PIN."

“It doesn’t look like a local idea, it looks like a bunch of people who came from abroad,” said the Citibank banker. “It is fraud that is committed on the machine itself on the front end,” he added.

The Citibank banker said that if there was fraud what one would see is a series of cash withdrawals. “A lot of banks that have a cash withdrawal limit, like the 10,000, have it per machine,” he said. “All the machines sometimes may not be networked and this happens when the machines are in down time at midnight. So if one has a limit it may not be monitored immediately.”

There have been unconfirmed reports of suspects being detained for questioning.

The banker said customers would have to be compensated by their banks. “I don’t think the banks are going to be compensated, but if the banks don’t compensate their customers they are going to be screwed. This is not a case of misuse like leaving an ATM card lying around and someone got a hold of it, then yes the banks won’t reimburse the money. But say I was away and someone did something and it was not me then I think the banks have to compensate,” said the banker.

The board of directors of the Central Bank of the UAE has instructed it to coordinate with the respective banks, to return bank customer's funds drawn through fraudulent means.

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