Tuesday, October 14, 2008

Banks give ultimatums to clients over fraud - - 12 Oct 2008

ABU DHABI // Banks have begun informing their customers they risk having their debit and credit cards blocked if they fail to change their PINs.

Nearly six weeks since fraudulent transactions began affecting accounts in the UAE, banks are in a heightened state of alert.

The National Bank of Abu Dhabi sent text messages to its customers on Friday warning them to change their personal identification numbers on their “cash plus and electron cards” before Oct 20 or their cards would stop working at automated teller machines the next day.

The National Bank of Dubai has also sent text warnings to customers and, in a telephone call, an employee of the bank said: “We have detected a fraudulent incident, because of which you have to change you PIN number.

“You need to do it, sir, or else the machine will not allow you to use your card.”

Although banks were unable to give any figures, it appears that many people have yet to change their PINs in the wake of the fraud.

Some customers said they had not received any text warnings from their banks.

An official of the National Bank of Abu Dhabi, who spoke on the condition of anonymity, said yesterday that the directives were sent “to protect customers” from fraud.

Their cards would be deactivated “unless they change their PINs”, he said.

Asked if the policy would inconvenience customers, he said: “It’s not holiday season, so 11 days [advance notice] is quite enough time to change PINs.”

According to banking sources, the fraud is still ongoing and people who have not changed their PINs are at significantly higher risk of having their accounts raided.

An Abu Dhabi Commercial Bank employee said customers had a month to change their PINs.

While some banks threatened to block cards, others, such as HSBC, have imposed lower withdrawal limits.

Mustafa Ramzi, a senior regional manager with HSBC, said: “For customers who have potentially compromised cards and not changed their PIN, HSBC has reduced their daily withdrawal limit to Dh500 (US$136).

Such HSBC customers can change their PINs at any of the bank’s ATMs in the UAE.

Customers should then call the bank at 8004722, after which their normal withdrawal limits would be restored.

The fraud is believed to have been carried out by thieves who breached a network used by banks to share sensitive credit and debit card information.

Counterfeit cards were created and used to make illegal transactions all over the world. It is believed that no bank that operates in the UAE is immune to the fraud.

“There will continue to be alarms and scares until the point of compromise is identified,” said a bank official, who spoke on the condition of anonymity.

By Hugh Naylor

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