Using an ATM? Be vigilant

2014-04-21 08:00

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Criminals are turning to easier pickings like automated teller machines as banks fight electronic banking fraud

ATM and internet banking disputes accounted for the majority of complaints last year, according to the banking ombudsman’s annual report for 2013.

According to the Ombudsman for Banking Services, Clive Pillay, the past year was one of the busiest in the history of his office with a total of 4?950 cases.

“The highest number of complaints are related to ATMs. Ironically, this increase can be attributed in part to the banks’ continuous upgrade of security measures to prevent electronic banking fraud, which in turn has led to criminals returning to easier pickings at ATMs.”

Pillay says a new trend has emerged where criminals are removing details of toll-free numbers from ATMs to delay the process of consumers notifying their banks that there is a problem.

This is of particular concern, given the stance that banks are only liable to refund you for fraudulent transactions that take place after you notify them that there is a problem with your card.

While the bank is required to take responsibility if your card is used fraudulently, the ombud received many cases where money was withdrawn using the card’s PIN and the bank successfully argued the account holder had compromised the card.

It is also important to know the bank is only responsible for refunding withdrawals that have been made after you have notified them your card has been compromised.

Case studies

The expensive night in Spain

During a visit to Spain, the complainant visited various nightclubs. He asked two local women to direct him to an ATM before they went to an apartment together.

The next day, he received SMS notifications from his bank informing him of withdrawals totalling R240?000. He complained that the bank should have detected the fraud in light of the amounts and stopped the transactions.

The bank responded that he had compromised his cards and PINs, and that each transaction had been carried out using the correct PIN.

The banking ombud noted that the complainant only requested a block on the cards hours after the disputed transactions.

“The bank is only responsible for transactions occurring after a card has been stopped,” says Pillay.

He also pointed out that as the complainant had actually been using his bank cards in Spain, the bank could not be held responsible for losses incurred through fraudulent activities.

Card stuck, but not stopped

The complainant’s card was stuck in the ATM. He then received two withdrawal notifications. While reporting the matter to the bank, he received a third withdrawal notification.

He claimed a refund of R5?000 on the grounds that his card had been cloned.

But the bank responded that the withdrawals had been made with his card and his PIN.

The banking ombud again held that the bank could not be held responsible for disputed transactions before the card was reported stuck.

But because the bank had not stopped the card immediately and had allowed the third fraudulent transaction to go through, the bank compensated the complainant with R1?000.

2013 statistics

Total cases: 4?950

ATM-related complaints: Increased from 1?100 in 2012 to more than 1?800 in 2013

Internet banking disputes: Increased by 200 to 820

Home loan disputes: 581

Average turnaround time: Reduced to 82 days from 87 days in 2012

Cases closed in favour of complainant: 1?973 (40%)

Total funds recovered from banks: R23?million

CONTACT

If you have a dispute with your bank that has not been resolved to your satisfaction, you can refer the dispute to the banking ombudsman.

Tel:011?712?1800

Fax:011?483?3212

Sharecall:0860?800?900

Email:info@obssa.co.za

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