Criminals target Standard Bank in R300m ATM fraud

Standard Bank has revealed that it was the target of fraudulent transactions to the tune of R300 million. Speculation was rife over the weekend when it came to light that a Japanese website had reported that a South African bank had millions stolen from it by criminals in a co-ordinated effort. The money was withdrawn from ATMs in Japan in a number of transactions last Sunday (May 15^th) between 5am and 8am, according to website The Japan News.

In a statement Standard Bank said: “The South African banking operations of Standard Bank Group have been the victim of a sophisticated, coordinated fraud incident. This involved the withdrawal of cash using a small number of fictitious cards at various ATMs in Japan. The target of the fraud has been Standard Bank and there has been no financial loss for customers. 

Standard Bank has taken swift action to contain the matter and the gross loss to the bank is estimated at R300m. This is prior to any potential recoveries that may serve to reduce the loss.” 

Standard Bank added that the relevant authorities have been alerted. “Investigations are at a sensitive stage and further information will be provided as appropriate,” it added. 

According to Japan News, police are looking into how a group of more than 100 people extracted the money from the ATMs, which were located in Tokyo and 16 prefectures, over a period of about two and a half hours on May 15. 

How did the fraud occur? 

The Japan News reported that the cards were forged based on data leaked about credit cards issued by ‘a bank in South Africa’ and that a criminal organisation of around 100 people was behind the fraudulent transactions. The withdrawals were made on a Sunday in Japan early in the morning – an ideal time because most banks are closed over the weekend. The criminals took care to draw up to the withdrawal limits to avoid early detection. 

It is believed the transactions were conducted abroad because it meant it would take more time to investigate and cancel them. 

It was a well-coordinated affair with each transaction only going up to ¥100,000 (R14, 327.69) the maximum withdrawal limit set for ATMs, and there were more than 14,000 transactions in the case. About 1,600 credit cards issued by Standard Bank were used, according to The Japan News. 

Will the perpetrators be caught? 

While it was a well-timed and co-ordinated operation, it is claimed that police may be able to catch the criminals by scouring through CCTV footage. An investigation into how the leak occurred will also be conducted together with the South African authorities via Interpol. Only time will tell if authorities will be successful.

Are any other banks affected? 

Not at the moment.

Absa have said: “Absa is confident that it was not affected by similar debit card fraud mentioned in a recent Standard Bank media release and subsequent media reports. At present, it does not appear as though the incident has affected other banks.   

"Absa is working closely with relevant industry bodies such as the Payments Association of South Africa (PASA) to understand the full context of this series of unfortunate events. Fraudsters across the globe are incessantly developing new ways to further their criminal activities. 

"Absa continuously collaborates with industry colleagues, regulators and law enforcement agencies to develop world-class controls to safeguard our customers from becoming targets to such criminal activity.  

"Absa would like to reassure the public and our customers that the bank has robust controls in place to prevent unauthorised access and that we are committed to ensuring their accounts are not compromised.  Our customers can be just as confident doing business with us today as they have always been.”

Nedbank said: “Nedbank can confirm that it is not the SA bank referred to in media reports about fraudulent credit card transactions in Japan.”

At the time of writing, FNB had not responded.

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