Have you read or watched reports of bank robberies recently? I have seen no statistics and in truth do not know if it is actually true but the impression I get is that bank robberies, whether common-garden ones or those that are the stuff of Hollywood movies are now few and far between. It could be partly due to banks’ increased security, the ubiquitous CCTV cameras etc. But it is more likely due to the fact that robbers no longer need to put their lives and freedom at risk by their physical presence in the bank when it is far easier and safer to rob banks or more likely their customers from the comfort of their homes which could be in Nigeria, Russia, Nether Wallop or anywhere else in the world.

Yes, the invention of the Internet has brought huge disruption and great opportunities to the way we live and do business. But as with all inventions it has provided criminals with a new and much easier way to transfer other people’s wealth into their own coffers. Expats are particularly easy targets and are generally less protected than people living in their home countries.

 

So how do they rob banks?

The more sophisticated criminals have succeeded in breaching some banks’ security systems but their customers are far easier targets. Apart from identity theft and the ‘skimming’ of ATM cards there is the more sophisticated art of ‘phishing’. This involves the setting up of a fake website made to look identical to a bank’s actual website. To ensnare victims cyber robbers will send out thousands of e-mails purporting to come from the bank urging recipients to click on a link to their website to access urgent information about their account. Of course most recipients will not even have an account with that bank so they will ignore it but those that do have an account will be quite concerned and are likely to promptly click on the link. Close examination would   show the website address is very slightly different from the genuine address but this can easily be missed. Once into the website the customer will be asked to confirm security details and hey presto, the information is now in the fraudster’s hands. So simple.

Some years ago I took a call on my office landline from my bank in the UK. Or at least the person said he was calling from the bank. He asked me if I was interested in moving my deposit into a product paying a higher rate of interest. I said I might be interested so he said first of all he needed to ask me a few security questions. This is normal procedure of course when you call your bank. But I was not calling my bank; the bank was calling me. So I pointed out to the caller that I needed him to prove his and the bank’s identity first by answering a few of my own security questions. He hung up.

 

Who pays when your account gets raided as a result of a scam?

It depends. Usually the bank will pick up the tab if you have been fooled as a result of a ‘skimming’ device placed in an ATM or if you are the victim of a sophisticated scam. But if you have been negligent or careless in the eyes of the bank, such as allowing others to see or know your PIN number, password or other security details they have every right to refuse reimbursement. It is at their discretion and usually comes down to reasonableness. If they hold you responsible for the losses it would take a long uphill battle to force them to change their decision. In the worst case scenario you could lose all the money in your account.

One way to reduce the impact of such a disaster is to spread the risk by having several bank accounts. But taking great care to protect security details, PIN numbers etc is the best way to keep the risk down. Check your accounts online frequently and question any anomalies.

 

What about credit card fraud?

This is massive and harder to prevent. Credit card slips can easily be copied and PIN numbers memorised by rogue employees. A client once reported that he had a false debit charged to his brand new credit card. But he had used it only once and that was to pay for services at a photocopying shop! So the culprit was easily identified. In fairness to the banks most have now developed stronger security systems, including the immediate transmission to customers’ mobile phones of every transaction so that they can be alerted immediately of any unauthorised transactions. Credit card PIN numbers are now meant to be used universally but I   find I am still offered the choice of PIN or signature in both Jakarta and Bali. Again, the bank will decide whether to pick up the tab or not, depending on whether they decide the loss was due to your carelessness.

The solution again is to take great care of your card and PIN number and to have more than one card (but not too many!) so you still have access to credit should one card be blocked.

 

Beware of the Internet ‘jungle’

Losses incurred by banks represent just a fraction of losses that can be linked directly to or with the assistance of the Internet. They include stolen identities via e-mail providers and social media channels, scams on the Internet, fake or misleading advertisements, pension fraud (a big problem in the UK), investment scams to mention a few. Don’t feel         embarrassed if you have been a victim of one. Our industry professionals have been duped as well and I know cases where lawyers and even a retired High Court judge have been taken for a ride. No room today to go into more detail but I hope to share these examples with you in future articles to help you recognise the warning signs and avoid falling into the same traps.

In the meantime, take a close look at the addresses of any strange e-mails or websites that you are unexpectedly referred to that look like the real thing. Carefully guard and regularly change your PIN numbers and passwords.

And if things become desperate and you are thinking of robbing a bank, don’t waste your time. When you pass over the counter the note saying ‘This is a robbery – hand over some money’ the chances are the teller will ask you to go online first.

 

Colin Bloodworth, Chartered Member of   the Chartered Institute for

Securities and Investment (UK), has spent over 20 years in Indonesia. He is based in Jakarta but visits Bali regularly. If you have any questions on this article or related topics you can contact at : colin.bloodworth@ppi-advisory.com or +62 21 2598 5087.

 

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Copyright © 2019 Colin Bloodworth