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Banks looking for solutions to ATM fraud after two Russians and a Thai tourist police were arrested

According to police estimates the recent spree of ATM frauds from numerous banks in recent months has seen over one billion baht illegally funneled out of bank accounts.

What is disturbing about these crimes is that they are taking place in busy, affluent areas of Bangkok such as Phayathai and Lumpini, spreading fears among the residents of Bangkok that their AMT cards are not safe in any part of the city. Although two Russians and a Thai tourist police officer suspected of skimming in Bangkok and other provinces have been arrested yesterday, the police believe more suspects might be involved in the illicit operation.

ATM fraudThis form of ATM crime is called ATM skimming and involves a device being placed on a digit pad and card insertion point of an ATM which reads the cards data and Pin number being used by the unsuspecting victims of these crimes. In some cases the villains use a small camera to secretly monitor the Pin number.

For many these incidences have raised the awareness of the safety and potential risk of using ATM cards and a number of experts are now pushing the advantages of using chip and pin cards that provide more security for debit and credit cards. The Bangkok Bank are also citing these benefits and have previously suggested that every bank in Thailand should adopt the chip in pin system over the next two years.
Bangkok Bank PCL, which is considered to be the first bank in Thailand to import the technology and many of the banks are following suit and have already applied for the new technology, others are looking at other alternatives in order to solve the problem of ATM crime.

The Deputy Manager of Bangkok Bank, Khachornwut Tayanukorn, explained that under the chip and pin system, the chip card will contain a small CPU inside the cards. Once a card is inserted into the machine, the information stored in the magnetic tab and the CPU must match each other. The main account information is stored inside the chip and a separate password is required to access it.

Mr. Khachornwut said “Even if the card is skimmed, the tampered machine will only reach part of the information. The information stored inside the chip will be unavailable to the skimmers.”

However, he added, the disadvantage of the card is that it can only be used with Bangkok Bang’s machines. “We’ve got 8,300 machines and so far it was more or less ok. But if the entire ATM system changed to the chip and pin system it would be of great benefit to our customers.”

Kris Chantanotoke, Executive Vice President for the Bank of Ayudhya (Krungsri), said that the bank is currently choosing the appropriate software and possibility to improve the ATM system, and that there is possibility Krungsri ATMs will eventually adopt chip card as well.

But the bank will be required to spend an enormous sum of money to change the operating system, Mr. Kris noted. According to Mr. Kris, each cash machine costs at least 200,000-300,000 baht to replace.

ATMSMeanwhile, Pongsit Chaichatphonsuk, Executive Vice President of Siam Commercial Bank (SCB), said the bank has previously tried to equip anti-skimming systems to its ATMs, but the skimmers successfully cracked the system and found ways to find the users information despite the new security measures.

“I personally think there is no system that can prevent the fraud completely 100%,” Mr. Pongsit asserted, “The conversion to chip card system will not guarantee that it could prevent the fraud neither.”

He added, “Also, considering all the potential costs involved, it might take a thousand years to earn the profit”.

SCB operates about 9,000 ATMs and 70% of them are incapable of reading chip cards, Mr. Pongsit said, with over 10 million debit and credit cards in circulation. “The overhaul is going to take a lot of time and a lot of money, and we cannot push the burden to our customers”.

Mr. Khachornwut, of Bangkok Bank, agrees that chip and pin will not be a permanent answer to the problem of skimming.   “The customers should always be vigilant of their account activities regardless of the developed technology in fraud prevention, because the skimmer gangs are also developing their own technologies to reach the money holders′ information,” Mr. Khachornwut said.

He suggested that the customers can act on their own preventive measures by choosing safe locations of ATMs, e.g. inside or around the bank′s branch, noticing any irregularity of the machine, and changing passwords frequently.  Another option is to sign up for SMS alert to see the movement of the account, only at 10 baht a month, which amounts to less than 1 baht a day in exchange for safer services.

Ms. Chanatip Jariyawiroj, director of Financial Consumer Protection Centre (FCPC) which operates under the Bank of Thailand, also advised the customers to be their own last line of defense.  “Technology has developed rapidly, and we must learn how to prevent the risk”, she was quoted as saying.  Ms. Chanatip said that if the customers notice anything suspicious at the ATMs, they should warn the machine operators as soon as possible.  Debit and Credit card users are also encouraged to check out the latest update to prevent risks of becoming skimmer victims by visiting www.facebook.com/hotline1213 or consult the FCPC call centre at 1213 hotline.

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