Tue, Oct 14, 2003 - Page 1 News List

No depositors to suffer losses over ATM card frauds

UPGRADE NEEDED Losses from faked ATM cards can be contained by using IC chip cards, but replacing current cards and technology may take five years

By Jessie Ho  /  STAFF REPORTER

Depositors who suffered losses from automated teller machine card frauds over the weekend will not suffer any loss, financial authorities said yesterday..

"Customers need not panic over the frauds, as their interests won't be affected," Minister of Finance Lin Chuan (林全) said at a press conference. "The ministry has demanded banks finish their investigations and make full compensation to established cases within two days after receiving complaints."

As of yesterday morning, 36 customers had reported losses of NT$3.78 million, Lin said. Among the reported cases, 21 were customers of the state-run Bank of Taiwan (台灣銀行) with losses of NT$2.66 million.

Based on the bank's preliminary investigations, the frauds were conducted through forged ATM cards. To prevent the ATM cards being copied from card-swipe door entry systems, Bank of Taiwan has sealed its system, said Lee Sheng-yann (李勝彥), president of the bank.

In addition to Bank of Taiwan, other affected banks included Land Bank of Taiwan (土地銀行), Chiao Tung Bank (交通銀行), Chang Hwa Commercial Bank (彰化銀行), Chinatrust Commercial Bank, Fuh Hwa Bank (復華銀行) and Citibank N.A.

The card fraud first appeared in Tainan last Friday and has since spread to Kaohsiung, Changhwa, Taichung, Taoyuan and Taipei regions. But Lin yesterday declined to elaborate on the number of victims and the amount of money that had been stolen.

At yesterday's press conference, Chou Yew-woei (周幼偉), a police officer of the National Criminal Investigation Bureau, said the bureau has targeted a criminal group while showing video tapes of two suspects to the public. Chou called on anybody who could identify the suspects to inform the bureau at 0800-000-110 and 0800-211-511.

The card fraud incident may speed up plans to replace normal ATM cards with IC cards, Pan Wei-jong (潘維忠), associate manager of Financial Information Service Co (財金資訊公司) which operates the nation's interbank information networks, said yesterday.

"Unlike current ATM cards that are easy to duplicate by copying the magnetic strips embedded in the cards, IC cards with multiple encryption systems are extremely difficult to copy," he said. "We believe the facilitation of the new cards and system will lower the forged card rate."

Currently 23 banks, including First Commercial Bank (第一銀行), Changhwa Bank (彰化銀行) and Hua Nan Bank (華南銀行), issue IC cards; others will launch the new cards by next July, Pan said. But because there are over 50 million magnetic-strip cards and 17,000 ATMs to be changed, the company estimates that the full replacement process will take another five years to complete, Pan said.

Robin Huang (黃瑞屏), president of Financial Information Service Co , suggested that banks lower the maximum amount that could be withdrawn from ATMs to reduce customers' losses and allow banks to better detect unusual account activities.

The incident scared many depositors, who rushed to banks to check their accounts yesterday, even those whose banks were not targets of the frauds.

"Many of our customers came in to queue in front of counters instead of using ATM cards to check their balance," said Peng Feng-ying (彭芳英), an assistant manager at Union Bank of Taiwan (聯邦銀行). "We'll make more inspections of our ATMs to avoid similar frauds."

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