Tanzania Daily News (Dar es Salaam)

25 November 2012

Tanzania: Heads Roll As ATM Theft Wave Hits Local Banks

AUTOMATED Teller Machine (ATM) theft in the country is a new experience and concerned authorities have advised financial institutions to consider and institute immediate measures to prevent it.

Such theft has resulted into a number of banks having to pay colossal amounts of money as compensation to their clients who have had their monies stolen by ATM thieves.

According to sources and unconfirmed reports, the banks have lost 800m/- in compensation payments to affected customers.

An ATM is a computerized telecommunications device that enables the clients of a financial institution to perform financial transactions without the need for a cashier, human clerk or bank teller.

ATMs are known by various other names including ATM machine, automated banking machine, cash dispenser (Germany) and various regional variants derived from trademarks on ATM systems held by particular banks.

They are being referred to as automated banking machine (ABM) in Canadian English, cash point, cash machine or, sometimes, a hole in the wall.

In a two-week survey conducted by the 'Sunday News" in several banks in the city, some sources have confirmed that ATM theft has hit several banks both in Dar es Salaam and other regions, including Mwanza and Arusha.

In fact two employees of Tanzania Standard (Newspapers) Limited (TSN), the company that publishes the 'Sunday News', have fallen victim of ATM theft, also known as skimming.

Fortunately though, both employees were able to get their money back after registering their claims with the respective banks. "I went to the ATM machine and drew 400,000/- that fateful day. Suddenly on my way home, I received a telephone banking message stating that another 400,000/- was withdrawn, " one of the employees said.

He added that in an hour, another message was delivered showing that another 400,000/- was again withdrawn. "The next day I contacted the bank," he added. "It requires a lot of patience for one to be able to complete the procedures, including getting a letter from the bank to the police," said one of the TSN staff.

He said once the procedure is complete and investigation done, then the bank proceeds to pay the lost cash. A banker who preferred anonymity said that such crime was mainly carried out by fraudsters from Eastern Europe criminals. Sources said the police managed to arrest two people in Mwanza in connection to ATM theft (card skimming) and the case is still under investigation.

Recently, an Eastern European couple was caught in the act in a Dar es Salaam bank. The 'Sunday News' contacted several banks in the city, including CRDB, NMB, Stanbic and NBC to get their comments on the issue.

However, it was NBC only who responded, immediately sharing their ATM theft experience and explaining how they were dealing with such crime. Police authorities, mainly the Directorate of Criminal Investigation, are preparing a detailed report on cyber crime in the country that will be released soon.

The Bank of Tanzania (BoT) is also preparing a report on ATM theft. The Head of Marketing, Communications and Corporate Affairs at the NBC, Ms Mwinda Kiula-Mfugale, said that the ATM scam was robbing its customers of their hard earned money and savings.

She, however, could not give any figure of the loss on her bank's part. "This crime is affecting the whole banking industry at the moment. The matter is yet to be discussed by the Tanzania Bankers' Association (TBA)," she said.

Ms Kiunda-Mfugale observed that it was appropriate to view the matter in the context of the entire Tanzanian banking Industry. Asked whether the bank had any word of advice to their customers concerning ATM safety, she said card holders should be wary of any suspicious 'loose ends' in the ATM chambers, including lingering 'customers' and defective or machines that might have been tampered with.

"Never lose sight of your card, protect your pin at all times by even covering your hand when entering the code and make sure that there is nobody within a metre while transacting." She also assured the customers that it is possible to recover lost cash if they followed the procedures.

"What is needed is for the customer to lodge a complaint to a nearby NBC branch and after thorough investigation, the bank will refund the stolen money," she said. Meanwhile, financial institutions in the country have reportedly been networking at both local and international levels on ways to combat the crime.

"We are also working tirelessly to improve the security features of our cards," Ms Kiula-Mfugale told the 'Sunday News'. She called on clients to report to the bank or the police any suspicious characters found fiddling with the money machines, also advising them to be extra cautious, including making sure that no one else watches while transacting at the ATMs.

She further advised customers that in case one draws cash from an ATM and the receipt shows a 'doubtful' balance, the customer should walk in and report the anomaly to the counters or call the NBC Contact Centre. The senior bank official further advised customers to keep constant track of their withdrawals by recording the balance.

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