Probe into phantom ATM fraud

By Maureen Marud - Cape Argus Classified - 10 May 2002

Phantom withdrawals from automatic teller machines (ATM's) will be subject of a special investigation by the banking adjudicator's office. That's the word from adjudicator Neville Melville in his annual report for 2001, released yesterday.

The report notes that South Africa has more ATM crime than any other country, and adds that criminal activity is behind many complaints from South African bank customers.

It also announces the future use of forensic investigators to examine bank systems and events more thoroughly in "appropriate cases", blaming dishonesty and conflicting statements from banks and complainants in various categories of cases investigated by the banking adjudicator's office.

The report, which shows more ATM complaints dealt with in 2001 than any other category, says "There is no other country in which so-called ATM crime occurs to the extent it does here".

Describing phantom withdrawals as a continuing source of frustration, the report announces: "We intend to undertake a specific project to investigate this type of complaint". It says the complaints concern withdrawals made from accounts while the card-holder is in possession of the card.

"In spite of numerous complaints from people who swear that they had their cards in their possession at all times, never disclosed the PIN (personal identity number) to anyone else and never transacted at the sites indicated on the bank statements, the banks insist that it impossible for a transaction to take place without both a card and PIN."

There is some praise from the adjudicator's office for "serious and substantial improvements" by most major banks to upgrade security at ATMs.

The report refers specifically to Standard Bank ATMs, which it says are now more tamper proof.

"Standard Bank has also created a central department staffed by trained and experienced personal to deal with ATM related complaints.

It refers also the First National Bank's use of posters, local radio stations and neighbourhood watch groups to highlight ATM fraud, and Nedcor's upgraded ATM's.

"We hope other banks will follow the lead of these banks".