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Lane & Associates
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Internet banking fraud goes online in Durban 30/03/2001

By Maev Allen

Throwing your transaction slip into the bin next to the ATM can be a costly error as some unlucky customers of a Durban bank have learnt.

The commercial crimes unit is investigating a number of cases of Internet fraud that began with customer transactions at the ATM outside the beach branch of First National Bank (FNB), and resulted in thousands of rands being stolen using the bank's Internet service.

A security guard who was stationed at the ATMs has been arrested in connection with the fraud. The guard, who worked for a private security firm, was spotted on the bank's surveillance camera.

The footage showed him hovering behind customers as they drew money, then retrieving their discarded transaction slips from the wastepaper basket next to the machine.

According to an affidavit supplied by a private investigation firm, Lane & Associates, the guard watched as customers entered their PIN numbers, and then supplied this information as well as the customers' transaction receipts to a fraud syndicate.

The ATM slips, which display the customer's account number, were allegedly passed over to an FNB employee who retrieved further details to access the customers' accounts via the bank's Internet site.

Last month, one unsuspecting customer had an alarming R24 000 transferred out of his account.

Lane & Associates have identified two suspects they believed were part of the syndicate, but no one else has been arrested.

FNB called off the private investigation and the matter has been left in police hands.

Superintendent Paul Kontominas, head of project investigations in organised crime, said: "Our problem is that the criminal is faceless, thanks to the ease of the Net."

Kontominas said this system worked only if the customer was not a registered Internet banker, because when a customer registered at the bank's Internet site, he provided his own password to replace the pin number.

William Ramwell, speaking for the bank, reassured customers that the fraud had been detected and "quickly stopped by the joint actions of FNB's branch and Internet staff".

Kontominas said that Internet fraud was a growing problem, and one that was difficult to fight because of the anonymity of the Internet.

"By the time the crime is reported and we trace the account destination, the criminals are long gone".

Kontominas said that incidents of Internet fraud had not been restricted to FNB. Cases had been reported at other banks.

He said the problem of Internet fraud was not one to be solved by the police, but needed changing the system of banking which allowed these loopholes in security.

Kontominas urged the public to be extremely cautious when making transactions.

He said ATM users should retain their transaction slips and throw them away later.

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