Banks must protect customer accounts: consumer advocate

Banking institutions should be more active in protecting depositors' interests, instead of demanding that consumers take cautious measures to safeguard their money, as they put their trust in banks, the Consumers' Foundation (消基會) said yesterday.

"Automated-teller machine [ATM] card fraud is not something new in Taiwan," said foundation secretary-general Cheng Jen-hung (程仁宏) at a press conference yesterday. "The problem is that no banks really pay attention to security issues ... What they've done was just ask consumers to assume the risk of financial losses on their own."

The recent ATM card frauds that began last Friday have caused a near-panic among some consumers, thereby highlighting the issue of ATM transactions security. The police have found that criminals duplicated cards from the card-swipe door-entry system, and stole pin numbers through hidden cameras installed in the machines. The crooks would then use this information to clean out victims' accounts.

Chang Wan-tung (張萬同), convenor of a financial panel at the foundation, said the trick has been employed before, but victims usually ended up bearing the brunt of their losses due to the difficulty of presenting substantial evidence that they were the victims of a fraud.

Although banks involved in the recent high-profile scam have guaranteed that they would make full compensation to victims, Cheng said this was not a good enough remedy.

"It's time to inspect banks' security measures and risk-control management," Chang said. "It is a bank's duty to check if their ATMs are safe for use, not consumers."

Aside from speeding up the adoption of cards with embedded IC chips that are difficult to copy, Chang suggested banks outfit ATMs with sensors to prevent installation of hidden cameras and establish a task force to inspect unusual account activity.

Banks have promised to reimburse stolen money under to Article 7 and 51 of the Consumer Protection Law (消保法). But Cheng said depositors can also demand a certain amount of punitive sanctions.

"In the future, the Ministry of Finance and banking institutions should conduct a complete investigation and establish a compensation mechanism to reassure the public," Cheng added.