Bank of Tanzania speaks out on ATM theft

The Bank of Tanzania (BoT) has teamed up with four other specialized agencies to get at the source of cyber crimes which have so far eluded police and financial intelligence. BoT Director for National Payment Systems Lucy Kinunda revealed this recently that this joint high level task force has drawn expertise from the Central Bank itself, Tanzania Bankers Association (TBA), Tanzania Communication Regulatory Authority (TCRA), Financial Intelligence Unit and Cyber Crime Unit in the office of the Director of Criminal Investigation. Ms Kinunda elucidated two major tasks before the team: to study the escalating incidents of theft of cash from Automated Teller Machines (ATMs) across the country and to recommend measures to curb them. In response to inquiries from the Guardian On Sunday, she said the Central Bank and the other stakeholders had taken measures to curb cyber thefts. In the meantime, she said, BoT had since directed all commercial banks to enhance their risk management processes and ensure that dishonest staff are prosecuted as well as ensure strict vetting of staff done frequently, among other things. The Central Bank has also directed the commercial banks to carry out awareness programmes on the safe use of ATMs, including careful and handling of sensitive details such as Personal Identification Number (PIN) to protect their accounts against unauthorized access. Commercial banks, Kinunda says, also have to sensitize their customers on the risks involved when they disclose critical information such as their PINs to relatives or close friends. Furthermore, banks have been instructed to enhance safety of their ATM machines by deploying operational cameras such as installing Closed Circuit Television (CCTV) and implement anti-skimming measures on their ATMs.

Governor of the Central Bank of Tanzania, Professor Benno Ndulu

Ms Kinunda further revealed plans to compel commercial to expedite adoption of Europay, MasterCard, and Visa (EMV) standards, a global device for authenticating card transactions using microchip technology. The device was developed in 1994 through a joint effort by Europay, MasterCard and Visa (EMV) that sought to establish guidelines to ensure global payment interoperability, fraud security, and the relevance of worldwide card networks. Kinunda added that commercial banks had therefore been instructed to adhere to regulations or directives from the Central Bank on the safety and standards in the industry. However, she said, on its part, the Central Bank would review the legal and regulatory environment for electronic payments to include, among other things, sanctions for possession of unauthorized customer information. Kinunda explained that despite internal fraud element, the level of thefts at ATM booths could still be made worse by weaknesses or inadequacies in security levels of infrastructures. “As such, external fraudsters take advantage of this and use several devices which are installed in the ATM to perpetrate their fraudulent activities,” she said. To commercial bank customers, Kinunda says: “The problems we experience are not unique to Tanzania … they also happen in other developing countries as well as in developed countries of Europe and America.” She said the Central Bank and the banking fraternity were working to hard to implement several effective measures aimed at ensuring the safe use of cards in ATMs and POS devices. Finance Minister Dr William Mgimwa also briefed the Guardian on Sunday mid this week, admitting that theft of people’s money from bank accounts was escalating, imploring banks to establish strong mechanisms to beef up internal security, also raising the spectre of “moles” of untrustworthy workers who keep on tracing confidential reports of their customers from within and disclose them to aunauthorized parties. Police reports state that in the past few years a total of Sh1.3 billion; $551,777 and Euro 8,897 had been stolen across the country through different forms of cyber trickery. ATM theft commonly known as “card skimming” has now become a critical problem across the country, notably the city of Dar es Salaam – where the burden of refunds is weighing down man banks. Unconfirmed reports from financial experts indicate that the banks had since coughed up some Sh800 million in compensations.