April 2013 Issue

The 'Newsletter on Financial Fraud' from CustomerXPs is your monthly insight into the various new fraud types and methods used by fraudsters globally in the banking space.

This will help you stay abreast of all the latest happenings in the banking fraud space.

SIM swap fraud 'rampant'


SIM swap fraud in SA is rife - with up to 50 cases a month being reported to the country's largest mobile network.  A long-standing crime, the scourge of illegal SIM swaps was highlighted again recently by reports of a customer who lost R97000, after visiting his service provider for a routine SIM swap.

SIM swap fraud (identity theft) is a precursor to internet banking account takeover.

Here is the modus operandi

1. Fraudster acquires personal information & internet banking credentials and of victims through social engineering techniques on internet. 

2.  Fraudster gets replacement SIM for the victim's mobile.

3. Fraudster uses the replacement SIM to get the security messages and OTPs for adding beneficiaries and performing funds transfers.

Mitigating fraud

The operators have said they have various measures in place to prevent SIM swap fraud and subsequent theft from taking place in as much as in their control. The SAPS,   they say, is also involved in concerted efforts to curb the problem.

Vodafone has recently implemented a PIN authentication service here customers create a personalized five-digit PIN that is used as authentication when they call the call center to activate a new service request.

Cell C says it has "zero tolerance" approach and takes SIM fraud seriously. They are working closely with SAPS and banks to curb this problem.

Telkom Mobile notes that SIM swaps can happen only in the store. However, fraudulent SIM swaps are mitigated as customers have to be verified by providing a proof of ID.

However, this is a unique problem since the bank alone cannot detect the complete modus operandi and the telecom operator is not held liable since the other leg of the modus operandi is going through banks. Telecom operator at the best can tighten the SIM replacement process and ensure that the employee collusion is not happening for SIM swap fraud.

Source: IT Web

Southern Africa experiencing increased mobile, Internet banking fraud


Mobile and Internet banking fraud is on the rise in Southern Africa and is threatening to derail the progress that has so far been made to revolutionize banking services in the region.

Officials in both Zambia and South Africa are warning banks they should not compromise on security in light of the increased risks.  A new report for banking services compiled by the Ombudsman for Banking Services in South Africa has revealed an increase of 8 percent in mobile fraud and 3 percent in Internet banking fraud cases in the country.

"There has never been a greater need for security and control in the banking environment than currently because of the rise in Internet banking fraud," the report said. It added that banks have a duty to commit to the country's code of banking practices, which calls for a secure and reliable banking and payment system. Bankers Association of Zambia (BAZ) has warned banks about an increase in cybercrime and urged them to put precautionary measures in place.

A number of local and international banks in Zambia have reported phishing attacks on their Internet banking systems, and in some cases they have been forced to temporarily close branches to protect customers' money.

Source: Computerworld Zambia

Bank official, couple held in Rs. 19crore fraud


The Central Crime Branch on Wednesday arrested the chief manager of a nationalized bank, a businessman and his wife for defrauding the Ambattur branch of the bank of 19 crore.

The Method:

Police said Canara Bank chief manager V Jagadeesha, Future Techiniks Pvt Ltd managing director M Balasubramanian and his wife Chitra Balasubramanian, a director in the company, had conspired to embezzle money from the bank.


An investigating officer said Balasubramanian, who owns Future Techiniks, Anna Nagar, assured Jagadeesha that he would give him part of the money if he sanctioned a large loan.

Balasubramanian, who told Jagadeesha that he had operated an account in Canara Bank for 18 years, claimed his company had bagged a contract worth 132 crore in Karnataka. He requested Jagadeesha to sanction a loan of 19 crore so he could take the contract. Despite being aware that the highest loan amount he could approve was 1.5 crore, he sanctioned 19 crore and subsequently transferred the money to accounts in Mumbai branches of private banks, the officer said

Source: The Times of India

Oman's Bank Muscat misses profit forecast on fraud provision


Bank Muscat, Oman's largest lender posted a 25.1 percent drop in first-quarter net profit, missing analysts' forecasts, as it booked a provision after some of its prepaid travel cards were hit by fraud. The lender made a quarterly profit of 25 million rials ($64.9 million) in the three months to March 31, compared with a profit of 33.4 million rials in the prior-year period,  it said on Wednesday

Five analysts polled by Reuters had, on average, estimated a first-quarter profit of 26.5 million rials.

The bank's shares were trading down 0.9 percent at 6.30am GMT on the Muscat bourse. The shares have risen 10.4 percent year-to-date.

Bank Muscat made a 15-million-rials one-off provision after some of its prepaid travel cards were hit by fraud, it added.

The lender said in late-February it would have to take an impairment charge of up to 15 million rials after a small number of the cards were hit by fraud - an amount United Securities calculated was around 10.5 percent of the bank's estimated 2013 earnings.

The cards allow users to carry currencies abroad rather than using their debit or credit cards in foreign countries, which can be expensive.

Source: alarabiya.net

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