ATM Fraud Prompts Text Alerts

Singapore Bank Launches Mobile Alerts After $1 Million in Losses
ATM Fraud Prompts Text Alerts
Two suspects have been charged for the roles they played in a $1 million [U.S. $774,594.06] ATM skimming scheme that hit some 700 DBS Bank customers in Singapore.

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In response to the attacks, DBS, one of the largest retail banks in South East Asia, last week announced plans to launch a real-time SMS/text alert service.

Tom Wills, a fraud analyst for Javelin Strategy & Research who's based in Singapore, says institutions in other markets, such as the U.S. and Europe, can learn from DBS's example. "Offering SMS alerts to customers for ATM withdrawals is a smart move for any financial institution, because it takes advantage of the strengthened transaction security that mobile out-of-band messaging offers," he says.

Wills talks about opportunities for mobile SMS/text alerts during a webinar he's hosting later this month entitled, Fraud Prevention: Utilizing Mobile Technology for Authentication & Transaction Verification.

Loke Siew Fei and H'ng Gaik Chin were arrested last week after their hotel room was raided by the Commercial Affairs Department of the Singapore Police Force. During the raid, investigators discovered skimming equipment, a pin-hole camera used to record PIN entries and a fake ATM fascia, used to cover an ATM's card reader. The two now face up to 10 years in prison.

On Jan. 5, the bank notified its accountholders of an ATM-skimming scheme that had targeted what was thought to be only 200 customers. On Jan. 6, the bank confirmed 400 compromised accounts had been connected with the scheme, which was traced to two ATMs in Singapore. The fraudulent ATM withdrawals were conducted in Malaysia.

Phil Blank, who works in Javelin's Security, Risk and Fraud Practice, agrees mobile technology is vastly underused as a means of communicating transactional information with consumers. He says most institutions, especially in the United States, are not keeping up with fraud trends, and they fail to adequately leverage mobile technology for alerts.

"If FIs [financial institutions] would encourage consumers to set alerts on their credit and or debit cards, a lot of this would be detected a whole lot sooner," Blank says. "Skimming is only effective if there is a delay between the time of the skim charge and the time the consumer notices it on their statement. Without alerts, the fraudsters will always have the upper hand."

DBS's move to launch SMS/text alerts for ATM transactions is innovative. Most mobile alert services have been limited to Internet banking; mobile serves as a channel to which an additional verification code for online login can be sent.

"This kind of countermeasure has most typically been deployed with Internet banking systems to thwart Trojan-based fraud attacks, but it can work very effectively in just about any transaction environment," Wills says. "This flexibility offers FIs a good way to leverage their investment in a customer alert system."

As a security precaution, DBS says it has temporarily blocked overseas ATM transactions for customers with no overseas usage history. The bank also is advising customers to update their mobile details, so they can stay informed about ATM activity via real-time alerts, which will be offered Jan. 17.

"Increasing evidence points to the unauthorized withdrawals as being part of a card-skimming operation," the bank said. "Preliminary investigations at this stage reveal that two ATMs at Bugis street have possibly been compromised. Customers who have chosen to enable their cards for overseas use will also receive a real-time SMS alert confirming their request," DBS says.

About the Author

Tracy Kitten

Tracy Kitten

Former Director of Global Events Content and Executive Editor, BankInfoSecurity & CUInfoSecurity

Kitten was director of global events content and an executive editor at ISMG. A veteran journalist with more than 20 years of experience, she covered the financial sector for over 10 years. Before joining Information Security Media Group in 2010, she covered the financial self-service industry as the senior editor of ATMmarketplace, part of Networld Media. Kitten has been a regular speaker at domestic and international conferences, and was the keynote at ATMIA's U.S. and Canadian conferences in 2009. She has been quoted by, ABC News, and MSN Money.

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