ATM Fraud in the GCC

Sheikha Minor went to Bahrain several weeks ago, used her ATM card and was fraudulently charged over 1,000 KD. She needs to file cases and it may take her years if she can collect at all. There was another story in the paper recently in Kuwait about an American man (shame on you, dude!) working with a clerk at one of the local stores in Salmiya, using a machine to copy ATM data to access accounts.

The below is from Arab Times, 15 September 2008. (Quietly tucked back on Page 32.)

And so it begins in the GCC…..

‘Crisis of confidence’ Scare of ATM card fraud ‘rattles’ UAE consumers

DUBAI, United Arab Emirates, Sept 14, (AP): While much of the business world is Focused on the fate of Wall Street titan Lehman Brothers, bankers here in the Middle East’s budding financial hub are struggling to fix a very different crisis of confidence: the security of customers’ bank accounts. Consumers are growing increasingly concerned about the safety of their savings following a series of cell phone text message warnings last week related to a spate of overseas fraud attacks. Different responses and recommendations — or lack thereof — by local banks have only added to the confusion. Some institutions automatically lowered ATM withdrawal limits, while others prevented customers from accessing their accounts outside the country altogether. Problems using debit cards at supermarket checkouts have also been reported.

Drain
The warnings came after criminals apparently outside the country were able to access and drain the hank accounts of an unknown number of cardholders. A large number of banks in the UAE were thought to be affected, industry experts said, although few firms reached for comment would give any indication of how many Customer accounts were tapped. Jonathan Campbell James, HSBC’s 3 regional head of security and fraud risk in the Middle East, said a “very small” number of customers at the global bank had been affected. An official at the National Bank of Abu Dhabi, who declined to be named because he did not have full details on the matter, said he believed “very few” accounts were accessed. Dubai Bank, part of the govern mentrun Dubai Group, was the only bank to release a number, saying that 42 customers had been affected as of Thursday. All three banks said they would refund customers. Standard Chartered Bank said it “is aware of the current security concern with debit cards and is presently investigating” the matter, and is “working closely with the UAE Central Bank to reduce any inconvenience to our customers.”

Lines continued to form at ATMs into the weekend as worried customers heeded warnings to change their personal identification numbers or withdraw funds. “What you have here is a major breach of security,” said Paul Sherry, regional director of Middle East and Africa for computer network technology firm F5 Networks. “There’s a huge difference between gaining access to someone’s information versus getting access to somebody’s accounts and actually transferring funds.” HSBC’s James said it appears criminals were able to access A1’M information at another bank, and then use that data to produce counterfeit cards that were used internationally. Several banks in the UAE were affected, he said.

“The attack is more sophisticated than that routinely experienced, and has come from multiple countries,” he said in an e-mailed statement. The scare comes in the midst of the busy Ramadan holiday shopping season, and is the latest blemish on the city-state’s carefully crafted image as a safe and relatively hassle-free place to do business in the booming Middle East.

Effort
Dubai’s financial system has been under the microscope in recent months after the government launched an effort to crack down on corruption. A number of the emirate’s biggest companies — including some with close ties to the government — have been drawn into the probe, although no charges have yet been made public.

In the latest development, investment firm lstithmar World said Sunday that Vice Chairman Adel al-Shirawi and Chief Financial Officer Feras Kaithoum had “been suspended” from their positions. Shirwari was also removed from the state-controlled company’s board of directors. Both men have been detained as part of an investigation into their roles as executives at Dubai-based mortgage lender Tamweel PJSC. Tamweel last week said its deputy chief executive had also been held for questioning.