Banks stop the use of ATM in USA, China and some other international countries due to fruad

Some banks in United States of America, China and some other countries have reportedly stopped the usage of Automated Teller Machine in transactions due to an increased frauds mostly done via the ATM.
A top banking official who knows the nitty-gritty of the issue on Sunday, January 18, 2015 told Punch that the affected banks took the decision due to the whooping sums which their customers had lost through ATM fraud which were being refunded by the banks.

The source said, “A number of banks decided to deactivate their payment cards from working in the USA, China and a few other countries that are still using magnetic stripe instead of the chip and PIN.”


“The decision was caused by the rising cases of fraudsters using cloned Nigerian ATM cards to make transactions at shopping in malls in the USA and China,” he added.

“Apart from fraudsters using cloned payment cards issued by Nigerian banks to buy goods abroad, it was gathered that some of the payment cards had also been used to withdraw money from ATMs in foreign countries, especially in the US.

“This scam has been on for a very long time but it has reduced drastically since some banks decided to deactivate their payment cards from working overseas. However, what we have done as a bank is to tell our customers to inform us whenever they are travelling overseas so that we can activate their payment cards to work overseas. Once they tell us, we will activate it.”

Cases of electronic fraud are also prevalent in Nigeria as the statistics of the Central Bank of Nigeria revealed that in 2013, banks lost N40billion to electronic frauds.

Moreover, it was gathered that refunds made by banks to customers who were victims of cards frauds were in excess of N1billion with one of the ‘Systemically Important Banks’ making refunds in excess of N200million in 2014.

The Chairman, Committee of E-Banking Industry Heads, Mr. Tunde Kuponiyi, disclosed that banks had spent millions of naira to deploy  the electronic payment technologies in order to nip electronic frauds in the bud.

In reaction to the development, the Chairman, Chartered Institute of Bankers of Nigeria, Lagos State Branch, Mr. Abolade Agbola,  “There is no justification for it (deactivation of ATM cards); and what that will do is that people will limit the amount of money or specify the kind of account they expose to online transactions.

“I think the CBN is also insisting that when this issue has happened, it must be resolved speedily so that confidence will not be lost. And that is one of the reasons why banks will keep on changing their software to make it safer; and, of course, that is also one of the reasons the issue of national identity card needs to be fast-tracked, which is at the government level.”


Source: Trentonline.com