Protection from skimmers

While the three Romanians accused of skimming the ATM accounts of depositors and government employees at the Land Bank of the Philippines (Landbank) Metro Cebu branches languish in jail, it’s time for the local banking community to take stock of what occurred and set up more stringent measures to protect their clients.

In this instance, Landbank has only itself to blame for this mess for failing to update security not only of their automated teller machines (ATM) but also the ATM cards of its depositors and the government employees whose salaries are deposited in the government bank.

In fact, the technology used by the Romanians to make unauthorized withdrawals of money from the ATM accounts of their victims had been in existence more than two decades ago.

The 1991 James Cameron classic “Terminator 2: Judgement Day” has one of its main characters, a teenage John Connor, withdraw large sums of money from the ATMs using an ordinary card with a magnetic strip attached to a handheld device that traces random ATM account numbers with large deposits.

Indeed, the stacks of reward cards from a convenience store discovered by authorities in the rooms occupied by these suspects were believed to have been modified and used for the unauthorized ATM withdrawals.

Owing perhaps to their unfortunate, antiquated belief that ATMs are secured from robbers, the Landbank management in Cebu City disregarded a complaint filed by Cebu City Councilor Dave Tumulak about the theft of a large sum of money from his ATM account in their bank, thinking it was an isolated case.

Now that several victims have surfaced, including Judge Meinrado Paredes who reported the theft of at least P100,000 from his ATM account, Landbank management woke up from their stupor and assured their clients that they will address their concerns, including updating their security on their machines.

This belated action only serves to worry ATM depositors who are thinking about transferring their savings to passbooks, which is unfortunate since it would be a major inconvenience for them not to be able to withdraw their money at any time they choose.

But this should not deter people from placing their deposits in ATM accounts. Both they and the banks can protect themselves from these criminals by taking extra precautions to ensure that their cards are not “tagged” by devices used by these ATM skimmers as well as protecting their account numbers.

But it is to be expected that criminals will adjust to the technology used by institutions to protect the public from their nefarious schemes, so it is important that stakeholders make sure that they are one to two steps ahead in order to avoid being victimized.