Bank Card Fraud

09-11-2001

Credit cardsCredit cards A customer withdraws money from a bank machine in the centre of Prague. But how safe are the country's bank machines? This week, one of the country's biggest banks - CSOB - admitted a serious breach of security. There are reports that several hundred bank cards could have been copied, and the cloned cards used to withdraw large sums of money.

A credit card copying device was found installed in a CSOB security door - the swipe card machine that lets the customer into the lobby where the cash machines are housed. The device apparently copied and stored the magnetic data contained on the card. A bank card of course is useless without the PIN number - and to obtain that the ingenious thieves had installed a micro-camera attached to the cash machine with a magnet. The camera would record the customer tapping in the code. Hey presto.

The method has proved quite effective, and the beauty of the trick is that customers have no idea their card has been copied. Once the thieves have a cloned card and the customer's PIN number, the only defence is to block the card. CSOB has so far blocked 465 cards.

So far the only confirmed cases have been at just one CSOB bank machine. There were reports earlier this week that the Ceska Sporitelna bank had also been hit, but Sporitelna says it has investigated several cases and has ruled out foul play. Klara Gajduskova is the manager of external communication for Ceska Sporitelna.

"I'm very glad that I can say that these cases were only suspicions. We suspected about 8 cases of possible fraudulent copying of cards. But, when we investigated these cases it turned out that this was a false suspicion that the cards were okay. All our ATMs are okay so far, but we do not underestimate the situation and we keep monitoring both our ATM networks as well as our client's card transactions."

Klara Gajduskova from Ceska Sporitelna. Experts say the copying devices, which can remember information from up to 200 cards, is cheap and not even so advanced. Copying a card, they say, is as easy as copying a magnetic cassette tape. Experts lay blame on the banks, saying that had microchip cards been issued instead of magnetic strip cards, fraud cases such as these would not have been possible. But the introduction of more secure microchip cards would mean renovating all the cash machines and retail card readers in the country. And that would be hugely expensive.

09-11-2001