Stringent action needed to tackle banking fraud

THE EDITOR, Madam:

The Gleaner’s news report dated May 15, titled ‘$400 million fraud, point of sale (POS) emergency scrapped after financial institutions fell victim to scheme’, highlights an important development.

Based on how the fraudulent scheme operated, no customer’s account was impacted. By taking the POS terminals in offline mode, the fraud against the financial institutions amounted to some J$99 million. Thankfully, the financial institutions have now immediately scrapped all POS modes. In recent years, there have been a few cases where the POS machines were taken offline and monies stolen.

Revelation of the fraudulent multimillion-dollar transactions came hours after the Financial Investigation Division (FID) disclosed that a businessman is facing criminal charges for allegedly using a “sophisticated” scheme involving the use of POS terminals to fleece a local financial institution of almost $100 million.

The scheme involved POS terminals issued by the financial institution for legitimate business purposes, which were intentionally placed in offline mode “to exploit the system and commit fraud”, the FID statement said.

A businessman was arrested in Old Harbour, five cell phones allegedly belonging to him, his spouse and his brother were seized during the operation, as well as two locked safes containing a total of J$1.9 million.

The Gleaner report demonstrates the fact that various levels of fraud and cybercrimes have been taking place within the financial and banking sectors. There have been reports where customers have had their bank accounts hacked and their monies stolen. In many cases, when the matter is reported to the bank, it takes up to four months before the stolen funds are refunded to the customer. It is imperative that the banks and financial institutions take steps to have in place the most advanced cyberprotection and detection equipment to prevent the hacking of customers’ bank accounts. They need to implement a system so that customers are refunded their stolen funds within a 30-day period.

The high level of cyber-threats facing the banks must be dealt with in a professional, firm and systematic manner. Recently, a radio talk-show host asked, “Is the Jamaica Constabulary Force’s cybercrimes unit adequately equipped to investigate fraud and cybercrimes? There are media reports stating that cybercrimes reports to the courts are not forthcoming and delaying some scamming cases within the courts.

Action is required in this respect forthwith. Cybercrimes have to be cauterised before they become worse. If there are bank employees involved in these cybercrimes, they must be investigated. The penalties for bank fraud, lottery scamming and cybercrimes should be increased by some 500 per cent, and imprisonment not less than 10 years, for these categories of crimes. The current penalties are much too low.

ROBERT DALLEY

robertdalley1000@mailfence.

com