What you need to know:
- Customers losing their savings as new wave of ATM fraud sweeps through the country
If you thought your money is safe in your bank because you have never shared your ATM details with anybody, then you could be wrong.
A new wave of theft using automated teller machines is sweeping through the country, leading to the loss of customer savings daily. So widespread is the crime that police and banks appear helpless on how to contain it.
The number of complaints reported to various banks and police is on the rise, according to records seen by the Saturday Nation.
On Thursday, two Bulgarians, Ivan Petkov and Milko Kostadinov, were arrested and charged in a Kilifi court when they were found with 44 ATM cards and over Sh2 million
The money is believed to have been stolen from various bank accounts using the cards.
Further investigations revealed that the two had stolen the money belonging to a commercial bank in Meru.
Last week, several customers of the bank lost their money through the ATM withdrawals.
One of them, businessman Timothy Murega said he learnt of an illegal withdrawal through a mobile phone text message on November 11.
The message indicated that he had withdrawn Sh10,000 from an ATM point on Moi Avenue, Mombasa. He had, however, not set foot in Mombasa.
A staffer with the Truth, Justice and Reconciliation Commission, Mr Kenneth Mwenda, was alerted that a Sh20,000 withdrawal had been made at another ATM point in Mombasa.
Another customer, Mr Wilson Miungi, 56, reportedly lost a total of Sh120,000 between November 11 and November 14 through the same fraud.
In Westlands, another bank is preparing to refund Sh17,000 to a former domestic worker, Ms Agitsa Avunga, after she lost all the money from her bank through an ATM.
She had deposited the money on October 1 last year but found it missing when she wanted to withdraw it.
Enquiries with the affected banks confirmed they were unable to explain how the money was getting lost.
Most of them said they were left with no option but to refund the affected customers.
“These amounts may appear very small to the banks but to me they mean a lot,” Ms Avunga said.
Banks have also blamed the nature of punishments impose on suspects, saying the sentences are grossly inadequate.
One of the aims of punishing an offender is to deter the individual or those who may be tempted to commit similar offences, but the punishments are rarely deterrent, they said.
Detectives cited a case that was concluded in a Kibera court last month as an example of lenient penalties being meted out to suspects upon conviction.
In the case, CF2262/11, the accused persons who had been found with 19 forged ATM cards purported to have been issued by three local commercial banks used to fleece customers. They were fined Sh20,000 each or jail terms of 12 months in default.
The five had been charged with 12 counts before the court.
Kenya Bankers Association chief executive officer Habil Olaka concurred with the banks, saying there was an apparent disconnect between the punishment meted out and the crime committed.
He said banks had initiated discussions with the relevant arm of the government to come up with a solution to the problem.
“They use the money embezzled and not recovered to pay the fine and bounce back for another act,” said Mr Olaka.
Banking fraud detectives have warned that ATM theft is increasingly becoming a common crime.
There are more than 1.5 million ATM points around the world.
In accessing ATMs, officials use either passwords or a combination of entry keys. The most common ATM theft involves stealing card information.
Other criminals hack into the system and get information in case a person uses his or her card to pay for goods at supermarkets.
With this information, they may not need to have the victim’s ATM card to steal.
In one case in Meru, the fraudsters used a replica of the ATM card made with a simple electronic gadget that writes information to blank cards.
The other theft is through what is called card skimming. This involves the capturing of data from the magnetic strip on the back of an ATM card.
Skimmers are small and are often fastened near the ATM’s factory-installed card reader, and they can capture information such as the account number, balance, and PIN number from up to 200 used cards.