NZ ATM Attack Losses Hit $1 Million

Skimming Attack Part of Growing Fraud Trend

By , April 2, 2012.
NZ ATM Attack Losses Hit $1 Million

At least 500 debit accounts in New Zealand have been linked to skimming at five compromised ATMs owned by ANZ Bank and National Bank in Auckland. And authorities say that's likely just a fraction of the total damage, since some compromised accounts have not been detected or yet reported.

See Also: Mobile Deposit Capture: Balancing Fraud Prevention and Customer Convenience

ANZ Bank issued an alert on its website detailing the situation, saying, "We are still assessing the number of cards that might have been used in the affected ATMs."

Bill Farmer, CEO of Mako Networks, a PCI-DSS service provider, says cases of ATM skimming often go underreported in New Zealand. "With no local disclosure laws around card fraud or data breaches, these sorts of incidents seldom get reported here," Farmer says.

The New Zealand Herald reported that overall financial losses are nearing $1 million and rising, Auckland police stated.

"Our contact centre is continuing to speak to all customers whose cards might be at risk," ANZ says on its site. The bank is working to refund affected customers.

Jacques Ninzigamiye, an ANZ customer whose account was hit with fraudulent transactions believed to be linked to the attack, told the NZ Herald he lost $1,300 to a weekend ATM withdrawal in Bangkok.

ATM Skimming Around the Globe

This is hardly the first time banks in New Zealand have been hit by international ATM skimming rings. Over the past six years, attacks linked to crime rings in Russia, Romania, Canada and Malaysia have challenged New Zealand institutions and law enforcement.

Other global regions have similar stories:

Earlier this year, after skimming attacks hit nearly 700 DBS Bank customers in Singapore, banking regulators demanded institutions implement stronger fraud controls. [See ATM Scheme Spurs Government Action].

In the U.S., skimming stories are a weekly occurrence. One of the latest: Accused ATM fraudster Ismail Sali pleaded guilty to an ATM scheme that cost U.S. banks and consumers more than $300,000.

In Canada, detectives with the Toronto Police Department arrested seven individuals for the roles they allegedly played in an ATM skimming scheme that compromised at least 1,500 credit and debit cards and cost Canadian banking institutions more than CAN $360,000 [U.S. $361,161].

"Those are known losses," Toronto police Det. Ian Nichol said during a Feb. 28 press conference. "The actual losses are actually much greater than that."

Follow Jeffrey Roman on Twitter: @gen_sec

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