Govt probes foreign links in crackdown on banking fraud
December 13 2017 11:20 PM

By Zia Khan, DPA/Islamabad

Pakistani authorities are investigating how identity thieves collaborated with hackers in Europe and South East Asia to steal millions of rupees from thousands of bank accounts.
The countrywide crackdown started this month after an increase in incidents of identity theft especially in the city of Rawalpindi near the capital Islamabad, officials said 
Authorities have so far arrested more than a dozen local people for alleged involvement in breaching customers’ data security by ‘skimming’ crucial information from their debit and credit cards.
“The latest arrests were made last night,” said Imran Saeed, an official at the cybercrime wing of the Federal Investigation Agency, who is leading the investigation in Rawalpindi.
Skimming data from debit and credit cards is not new in Pakistan, but the problem has intensified in recent years with an increase in the use of plastic money.
Investigators are now probing the links between local identity thieves and hackers in Italy, France, Canada, India and 
China, said Saeed.
Links with hackers based in Malaysia and Indonesia are also being probed, said FIA director Abdul Hameed Bhutto, who is leading the crackdown in 
the southern city of Karachi.
Apart from Karachi and Rawalpindi, the investigation is now being widened to the eastern city of Lahore and several other towns of the central 
province of Punjab, Saeed said.
Thousands of account holders have been robbed and more complaints are being received on daily basis, both officials added.
“More arrests are expected,” said Saeed.
Yet, it wasn’t immediately known how many account holders have been robbed and how much money has been stolen, said Pakistani central bank spokesman Abid Qamar.
The State Bank of Pakistan early this month asked commercial banks to follow the standards of network systems for credit cards such as Visa and Master cards, and use an electronic chip instead of a magnetic strip on cards, Qamar said.
“We are still receiving complaints on a daily basis,” Bhutto added. “The actual size of the scam may be very big.”
In the scam, the criminals used an electronic device attached to ATM machines to steal data from debit and credit cards of customers, Saeed said.
The skimming device is a tiny gadget that often goes undetected by the consumers and sometimes even by technical staff at banks, said Imran Khan, an officer at a private bank.
The device reads account details including PIN codes from the magnetic strip on the cards, making it possible for hackers to build replicas, Khan added.
Local thieves sell the data to hackers based in Europe and South East Asia, who withdraw money in their countries, Bhutto said.
According to central bank spokesman Qamar, the hackers prepared clones of the cards to withdraw money from Pakistani accounts.
“It isn’t new. Such things happen in the world. We are worried that the security has been breached and have advised banks to take counter-
measures,” Qamar said.
“Controls in Pakistan have been weak. It is only now that the state bank has asked commercial banks to tighten security. The banks have also been ordered to return money to 
victims,” he added.
But Basharat Khan, who lost Rs100,000 ($911) several months ago, said he was yet to get his money back despite several reminders to the bank.
“I have no idea what to do,” said Khan, a health worker from the northwestern province of Khyber-Pakhtunkhwa, whose money was stolen after he used his debit card in Rawalpindi.
The FIA is also investigating several thousand cases of stolen identity in Karachi, said Bhutto.
Bhutto said individuals from Malaysia and Indonesia have withdrawn money from Pakistani accounts using data stolen through skimming devices in the city.
Saeed in Rawalpindi said as his team interrogates the arrested criminals, it appears the skimming scam is very widespread.
“It is a scary situation,” shopkeeper Azhar Ali said, “I fear being robbed if I use a credit card and also it is not wise to carry money because of street crimes like snatching.”
“I don’t know how to deal with it,” said Ali, who works in Islamabad but has to travel to Lahore frequently for business where he makes payment worth millions to traders.

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