Maharashtra tops in ATM frauds, Delhi, Tamil Nadu, Karnataka follow

Maharashtra reported 233 cases of ATM fraud in 2018-19, the highest in the entire country, Reserve Bank Of India (RBI) data, accessed by TOI, revealed. The data showed that Delhi grabbed the second spot with 179 cases, followed by Tamil Nadu with 147 cases of ATM fraud. 

In Maharashtra, people lost Rs 4.8 crore to  bank fraud, while in Delhi people lost Rs 2.9 crore. The country witnessed an increase in ATM fraud cases in general (up from 911 to 980). Assam, Arunachal Pradesh and Tripura were the only three states that didn’t report a single incident. However, the money lost came down from Rs 65.3 crore in 2017-18 to Rs 21.4 crore in 2018-19.

Police and cybercrime experts were quoted by the daily as saying that this was just the tip of the iceberg as amounts of less than Rs 1 lakh were not considered for the data.

They said crooks were now employing various means to get control of people’s bank accounts through ATM or debit cards. The most commonly used trick is installing skimmer devices on ATMs and point-of-sale machines, which are then used to fraudulently copy data from cards. This data is then put on blank cards and illegal transactions are carried out.

Last year, customers were asked to replace their existing debit/credit cards with new ones as the RBI had mandated banks to replace all existing magnetic stripe-only cards with EMV chip cards.

Chip-based cards use higher standards of data encryption and storage technology compared to magnetic stripe cards. Sensitive customer data is stored on a chip in these, making it difficult for fraudsters to access customer information. The information in the chip is encrypted and so is the transmission of information thereon. 

The shift to chip-based cards was driven globally due to increased risks of card cloning (cloning stems from magnetic stripe cards that have static information which is easily captured if the card is used at an ATM where a cloning device is installed).

Despite these measures, the number of incidents of ATM fraud has increased from 911 in 2017-18 to 980 in 2018-19. However, the amount involved has decreased drastically from Rs 63.3 crore to 21.4 crore.

RBI directed banks to implement anti-skimming solutions by March 2019

Alarmed by ATM frauds, the RBI had asked banks to upgrade their ATMs or else face action. In 2018, banks were asked to implement a host of security measures by August and upgrade all ATMs with supported version of operating system in a phased manner by June 2019. Anti-skimming devices prevent the skimmer from functioning. Similarly, whitelisting solutions allow only trusted applications to work on the ATM and block any other application. Now, we are over four months past the deadline and so far there has been no update from the banks on the same.

With regard to ATM/Debit card, Credit card and Internet banking transactions of over Rs 1 lakh, there were 1,367 frauds reported in FY 2016-17; 2,127 frauds in FY 2017-18; and 1,477 frauds in FY 2018-19, according to government data.

Also Read: RBI alarmed by ATM frauds; asks banks to implement strict security measures