The advent of debit card in Nigeria has projected the nation’s financial sector, aiding its competitive advantage in Africa. But as it aids the cashless policy introduced by the Central Bank of Nigeria, the innovation also requires certain security measures to avoid online fraud. Globally, debit card fraud has hit a 20-year high as fraud at Automated Teller Machines located in bank branches increased by 174 per cent between January and April 9, 2017, compared with the same period in 2016.
HOW FRAUD OCCURS
Computer technicians, who spoke with The Point, insisted that ATMs in Nigeria remained vulnerable.
The Managing Partner, Excel Point, Mr. Gbenga Shobowale, noted that most ATM cards did not have chip-and-pin protection as all of the information was stored on the magnetic stripe, which is a very old technology.
According to him, most fraudsters are still using an old technique called skimming, in which they attach a device on the ATM that can be very difficult to detect.
“When you input your ATM card, the attached device will skim the data from the magnetic stripe. Typically, a camera will also be added to the ATM machine, so that the fraudster can record your pin code. With this information, a new debit card can be created using the information skimmed from the magnetic stripe. Combined with the pin code, the manufactured card can be used to withdraw cash from ATMs. It is much easier to attach skimming devices at ATMs located in convenience stores than at bank locations, which is why ATMs away from bank branches are most vulnerable,” he said.
Another expert, Mr. Segun Hamzat, explained that there had been an increasing risk even at bank branches.
He said, “I have spoken with a number of fraud managers at large banks, and they have told me that, while the ATM machines at the bank’s lobby are well protected, one vulnerability had been increasingly exploited.
ATM machines away from the bright lights and cameras of a bank’s branch are at a much higher risk of being used for fraud. Whenever you need to get cash, use a bank’s branch of the ATM and do it during regular business hours
“When you visit an ATM out of office hours, you often have to put your card into a reader to unlock the door. This device has become vulnerable to specially designed skimming devices. And while fraudsters likely will not have your pin code, they can use the credit-card functionality of the ATM card to make other purchases.”
Here are five measures you can take to reduce the risk of being defrauded:
Use ATMs at a bank’s branch; cover your pin code. ATM machines away from the bright lights and cameras of a bank’s branch are at a much higher risk of being used for fraud. Whenever you need to get cash, use a bank’s branch of the ATM and do it during regular business hours.
When you input your pin code, make sure you use your hand to cover the number pad. That way, any camera will not be able to obtain your code.
Set up daily alerts with your bank. Most banks give you the opportunity to set up alerts. Opt for text message alerts, because it gets your attention. Set up the alerts so that any transaction greater than N500 using your ATM card results in a text message being sent to your phone.
Sign up for 2-factor authentication. Many banks give you the opportunity to sign up for 2-factor authentication. That means that a username and password are not sufficient for signing into your account. Instead, you need to have a text message sent to your phone, or an email sent to your account. You are usually given a number of options for setting up this higher level of security. Turn on the higher level of security wherever it is offered. But at the minimum level, you should set it up for adding a new payee for online bill-paying.
Consider a credit card for your everyday purchase
. Credit cards can be dangerous. For too many people, a credit card serves as a source of temptation to spend more money and get into debt. But, if you have the self-discipline to manage your credit card responsibly, it can be a wonderful tool. Put all of your monthly purchases on a credit card. That way you can keep very little money in your checking account.
When you are paid each month, pay for your home, utilities and single credit card bill. Then transfer the rest to a savings account, leaving a small buffer. Even if fraud occurs, your cash is not at risk. Instead, set a credit limit and even if your money is lost to fraud, it would be minimal, and waiting for a refund or getting justice will not be at pains. Although banks usually refund fraudulently siphoned money from someone’s account, especially if such fraud was internally perpetrated, it does not work out that way all the time.
ANYONE CAN BE A FRAUD VICTIM
You may likely be a victim of fraud. Your first goal should be to minimise the risk of it happening. Your second goal should be to know about it as soon as it had happened. And then you need to call the bank right away and report it.
“I have experienced fraud a number of times. But I found out about it right away, disputed it and never lost any of my own money,” a bank customer once told this correspondent.
