RESPONSE OF INTERNATIONAL COMMERCIAL BANKS TO CARD PAYMENT FRAUD

1. BARBADOS 2013 Presenter: Denver Frater Regional Director & Chief Security Officer Eastern Caribbean Security & Investigation Scotiabank RESPONSE OF INTERNATIONAL COMMERCIAL BANKS TO CARD PAYMENT FRAUD

2. Agenda • Introduction • Payment Cards Defined • Card Fraud Defined • Research Findings • Case Studies • Response to Payment Card Fraud

3. Introduction • Technology and modern communication have changed the pattern of human existence. • Financial Institutions/international commercial banks are continuously taking steps to redefine our safety and security strategies and methodologies especially in the digital age to ensure efficiency, convenience and a greater customer experience.

4. Introduction continued • Commercial banks have also recognized that card payment is the preferred choice of many customers when conducting business. • It is also a very attractive item for criminals, who are now trans-national in reach and borderless in their activities to: • access information • defraud financial institutions and • launder corruptly obtained money.

5. Introduction continued • This could pose a threat to the viability of commercial banks, as well as the integrity and stability of economies, especially those in small Island states. • Collaboration with the various stakeholders including Crime Stoppers is critical in ensuring appropriate responses to: • predict, detect, prevent and mitigate threats directed at our Financial Institutions

6. Payment Cards • A payment card is electronically linked to an account or accounts belonging to the cardholder. These accounts may be deposit accounts, loan or credit accounts. There are a number of payment cards including credit, debit/ATM and prepaid cards.

7. Payment Terminals • Cards are commonly used at: • Point of Sale Devices • Fixed • Mobile • ATMs • Online

8. Card Fraud • Is the unauthorised use of a payment card as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorised funds from an account

9. Common Types of Card Fraud • Counterfeit • Card Not Present • Conspiracy • Lost/Stolen • Identity Theft

10. Fraud Research Findings • Javelin Strategy and Research Inc. (https://www.javelinstrategy.com/) “2013 Identity Fraud Report”, advised that identity theft and associated fraud losses rose globally again in 2012. • The number of victims climbed to 12 million representing an 11 percent increase over 2011 with losses amounting to almost $21 billion

11. Case Studies Case Study 1 Case Study 2 Point of Sale:Example, service station attendant and your card! Attendant is working with criminals who provided him/her with a palm held skimming device • Criminals buy bank accounts from unsuspecting customers (courtesy of the Jamaican Gleaner http://jamaica-gleaner.com/gleaner/20130519/lead/lead1.html)

12. Response • Effective collaboration in conjunction with state agencies in tackling corruption, money laundering, financing of terrorism and other organized criminal activities through the process of: • Monitoring and Compliance • Card spend trends and patterns • Alerts • Hold funds/contact customer

13. Response continued • Investigation and Loss Prevention • Timely response and thorough investigation, of all reports and alerts of suspected fraudulent activities • Awareness (internal and external) • Collaborative Approach • Best Practices: Partnership between JCF and Commercial Banks in Jamaica “Operation Safe Card”

14. How can you protect yourself? • Use your hand or body to shield your PIN from onlookers when you are conducting transactions at a bank machine or at the point-of-sale

15. How can you protect yourself? • Treat your cards as if they were cash • Never write down or disclose your Personal Identification Number (PIN) to anyone, even if the request is purportedly coming from a bank employee; we never request this information • Closely inspect ABM’s and Point of Sale terminals for anything that looks suspicious or unusual

16. How can you protect yourself? • Never choose easy-to-guess PINs (such as your address or birthday) • Sign your card on the signature panel as soon as you receive it • Be sure when using your card for an online purchase that the website is secure. You should also be sure that you completely log off any website that you have made a purchase on and close the browser

17. How can you protect yourself? • Never give card or personal information over the phone or on the internet, unless you have initiated the call or the website order and you have verified you are dealing with a reputable organization, • Check monthly billing statements and purchase amounts against receipts, and immediately report any unauthorised transactions to your Bank • Report lost or stolen cards to your Bank immediately

18. Conclusion • A collaborative approach could only positively impact the efforts of Commercial Banks in the fight against fraud card payment. This I suggest can be achieved through the engagement and utilization of proven Crime Stoppers information gathering techniques and dissemination processes.

19. Conclusion • What was once regarded as mere white collar crimes, have now mushroomed into major criminal organizations, targeting the identity of legitimate customers/organizations in their quest to defraud Financial Institutions to support their endeavors. • Crime Stoppers have an enviable track record globally in the fight against crime and undoubtedly can be of tremendous help in mitigating this threat.

20. Questions

21. Thank You