LEGAL VIEWPOINT: Types of fraud in e-banking By Dr AbdelGadir Warsama Ghalib, Legal Counsel, Bahrain

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Dr AbdelGadir Warsama Ghalib, Legal Counsel, Bahrain

Electronic banking is almost taking a very significant portion in the banking industry. This vast remarkable progress took its shape and place based on the new e-banking laws and regulations issued in all countries, to give legal recognition and authority to such important banking service. Almost, all clients are dealing with banks through internet, mobile or other IT mechanism. This makes banking very easy, as services become easy and fast. This new situation, has given a golden opportunity for banking services to expand and cover all corners everywhere.

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However, the new development was not without a price. The other side of new situation, was the appearance of fraudsters who took the opportunity to benefit and exercise their dirty criminal games. The IT revolution has opened the room for new criminals and new crimes to come to surface and destroy all good sides of this new technology. New e-crimes came-up and grew rapidly to harm every person utilizing such new technology. No one is save from the new e-crimes and the new e-fraudsters.

The new e-frauds include, among others, phishing, identity theft, viruses and trojans, spyware and adware, card skimming, mobile scams… etc.

Phishing is a form of internet fraud that aims to steal information as card numbers, user IDs and passwords. A fake web site is created to look similar to that of a legitimate organization. An email or SMS is sent leading recipient to a fake web site and enter to personal details, including, security access codes. The page looks genuine but users are inadvertently sending the info to fraudster.

Identity theft is on the increase and can take many forms, from fraudulent credit card use, to your entire identity being used to open accounts, obtain loans, and conduct illegal activities. In this respect, you need to be suspicious if anyone asks for your personal information. Scammers use convincing stories to explain why you need to give them money or personal details.

The viruses and trojans are very harmful programs that are loaded in computer without your knowledge. The goal of these programs is to obtain or damage information, hinder performance of the computer or flooding with advertising. Viruses spread by infecting computers and then replicating. Trojans appear as genuine applications and then embed themselves into a computer to monitor activity and collect information. Using a firewall and maintaining current virus protection software can help to minimize chances of getting viruses and inadvertently downloading trojans.

As for, spyware and adware, when clicking on pop-up advertisements, ones that “pop up” in a separate browser window, it’s possible you are also downloading “spyware” or “adware”. These programs often come bundled with free programs, applications or services you may download from the Internet. Spyware or adware software covertly gathers user information and monitors internet activity, usually for advertising purposes. All are to be cautious about clicking on internet banners and pop-ups or downloading free programs and use security software to detect and remove spyware.

Fraudsters can use card skimming by illegal copying and capture magnetic stripe and PIN data on credit and debit cards. Skimming can occur at any bank ATM or via a compromised EFTPOS machine. Captured card and PIN details are encoded in a counterfeit card and used for fraudulent account withdrawals and transactions. They can attach false casings and PIN pad overlay devices in genuine existing ATMs, or attach a camouflaged skimming device in a card reader entry used in tandem with a concealed camera to capture and record PIN entry details. A foreign device is implanted in an EFTPOS machine capable of copying and capturing card and PIN details processed through the machine. A compromised EFTPOS terminal can only be detected by a physical inspection.

Above are some of malpractices performed by fraudsters using all advanced IT programs. We need to be more careful as we may be haunted by them at any time.