‘Tis the season for fraud
J’cans urged to keep close eye on debit, credit cards for the holidays
Published:Sunday | December 3, 2023 | 6:36 AMErica Virtue - Senior Gleaner Writer
With busy shopping seasons such as back-to-school and Christmas seeing fraudsters ramp up their activities to target the credit and debit cards of unsuspecting bargain hunters, Jamaicans are being warned to be extra cautious as they prepare for and engage in the season’s festivities.
“Globally, Christmas season is a period of high commerce. Where that takes place, we see an increase in fraudulent activities,” Dane Nicholson, the anti-fraud chief at the National Commercial Bank, its subsidiaries and the Jamaica Bankers’ Association (JBA), told The Sunday Gleaner recently.
“The other peak period [for fraud] in Jamaica is normally associated with back-to-school shopping, where a lot of commerce takes place.”
As such, it’s bumper crop season for complaints to financial institutions.
“White collar criminals morphed themselves into the season and take advantage of what is happening at the time,” Nicholson explained.
But still, he does not believe it is particularly easy for persons to fall victim to fraud in Jamaica.
“I wouldn’t say it’s easy for persons to be defrauded because we would have made significant strides in improving the technology around debit and credit cards. You would have seen the migration from magnetic strip cards to Euro-Mastercard-Visa (EMV or embedded microchip) cards … . There was no security around the magstrip, so the information could have been copied with any magnetic strip reader. As such, the industry moved to a more secure EMV contactless card,” Nicholson explained.
TAP-AND-GO IS BETTER
Even though significant strides have been made on the “card-present side”, he noted that it was always expected that there would be a shift from card-present to card-not-present fraud, where transactions are carried out without a physical card by using the number and other information from the card.
“That is what is happening now. So when customers go to a merchant for a transaction, they will tender their card. The collusive cashier or pump attendant will take a photograph of the front and back of the card in quick succession, and go and do a card-not-present fraud or we see an increase in data breaches,” Nicholson explained.
The JBA Anti-Fraud Committee chairman stressed that it is critical that customers take responsibility for their financial safety to reduce risks, adding that concerns that the ease at which cards can be tapped for payment is unsafe have not materialised.
“It is one of the most secure ways to conduct transactions. It eliminates a lot of things. It significantly reduces [fraud] to almost impossible, and we have seen no evidence of a tap-and-go transaction that [has] gone wrong based on the information that leaves the card. It is impossible for any compromise to take place, based on the time it takes, and for criminals to get enough time to make a duplicate card. Persons can’t get a chance to take a photograph of the back and front of the card, so I always encourage persons to use the tap-and-go option,” he disclosed.
For tap transactions, the card must be within four centimetres of the machine, making it “uncomfortably close” for it to be compromised, he stated. The CVV (the three-digit security code) also does not reside on the chip of the card.
“Even if they were able to get some amount of information through the tap, they would not get enough to produce a duplicate card. So I encourage persons to use the tap and go or the insert card – the chip feature. And if you use the insert option, you insert the card yourself. Don’t give it to the cashier or the pump attendant for them to do it,” he emphasised.
Nicholson explained that even when the whole process is visible, card insertion must be done by the owner as it will reduce the possibility for cameras placed in strategic places to photograph it to generate a duplicate.
“We have seen where unscrupulous cashiers set their phones in a strategic location and they take the card from you and have a conversation with you and they put the phone to the front of the card, take a picture, and turn the back to capture the information. That’s why you should always maintain possession of your card – at all times,” he stressed.
INVESTIGATIONS TAKE A LONG TIME
Fraudulent transactions account for a significant chunk of the losses and financial exposure, and many cases involve collusion with unscrupulous merchants. Several people have been arrested for perpetuating this fraud.
The Financial Investigations Division recently confirmed to The Sunday Gleaner that it is “actively” probing 11 cases at two financial institutions that have “potential exposure of hundreds of millions of dollars” and expects to get additional cases.
The Bank of Jamaica Financial Stability Report 2022 noted that between January 2018 and November 2022, deposit-taking institutions incurred average bank fraud losses of $900 million per annum, with 13,628 cases.
A marketing officer at a large distribution company told The Sunday Gleaner that he found himself indebted to one bank after his credit card was used to make nearly $300,000 in purchases locally and overseas.
“It could only have happened at one of two gas stations, one of which I used for the first time. It took three years for the matter to be settled in my favour, of course, for the places where the transactions were made I didn’t even know them,” he said.
Similarly, a chef had her account wiped out when she used her debit card to withdraw cash at a location along Washington Boulevard in St Andrew.
“I was cleaned out and I know the machine where it happened on the Boulevard. I just know it was there. These things involve so much trauma, because it takes these long investigations, and I am convinced that the banks blame you first,” she said.
Two years later, her case has not been settled and is still under investigation.