War against credit card swindles not yet over<\/p>\n
By Johannes Simbolon<\/p>\n
JAKARTA (JP): It was already three days after three Malaysians
\nhad made off with Rp 17 million (US$7,555) worth of jewelry from
\nthe store in Citraland Mall, West Jakarta, but the owner still
\nlooked frightened.<\/p>\n
\"I am afraid they will take revenge,\" she told The Jakarta
\nPost, requesting anonymity.<\/p>\n
The robbery was the latest in a wave of credit card swindles
\nsweeping the city. One of the suspects was caught at the crime
\nscene by the shop attendant and the mall's security personnel.
\nHis two accomplices, however, managed to get away with the
\njewelry.<\/p>\n
There is not yet any security system able to completely
\nprevent such crime. Shop are equipped with on-line credit card
\nauthorization, or EDC (Electronic Draft\/Date Capture), machines,
\nwhich are designed to detect fake or blacklisted cards.<\/p>\n
In the recent Citraland case, however, the machine failed to
\nreject the fake card proffered by the three Malaysians.<\/p>\n
The shop-owner only became suspicious because the three young
\nmen insisted on buying the jewelry in three separate
\ntransactions. She telephoned Bank Bali to check on the card and
\nwas told it was fake. From the code number on the Malaysian's
\ncard, it was confirmed that it had not been issued in Malaysia,
\nbut in the U.S.<\/p>\n
\"The bank official added that the method they used was very
\nsophisticated,\" said the jeweler, who has not suffered
\nfinancially as a result of the robbery. Under the existing rules,
\nthe bank will reimburse the funds lost, because she followed the
\nprocedures of checking the card. She would have been denied
\ncompensation had she not first checked the card with the on-line
\nauthorization machine.<\/p>\n
Brain<\/p>\n
Since credit cards were introduced here in 1973, about 1.5
\nmillion cards have been issued. Plastic money is gradually
\nreplacing cash as a means of payment. Most cardholders, however,
\nremain in the dark as to how credit card crimes occur. They only
\nbecome concerned when something \"unusual\" happens -- that is,
\nwhen they get a credit card bill that exceeds their purchases.
\nThen they complain.<\/p>\n
Unlike conventional criminals, credit card crooks never use
\nviolence. Instead, their tools are brains and technology. Banks,
\nin turn, have developed high-tech security systems, but it seems
\nthe crime world is always able to find novel ways of break into
\nthe system.<\/p>\n
\"It seems that the criminals have some kind of a research and
\ndevelopment center, where they devise new methods once a new
\nsecurity system is introduced,\" said a security officer at one
\nbank's card center, requesting anonymity for security reasons.<\/p>\n
According to the handbook issued jointly by the Indonesian
\nCredit Card Association (AKKI), the police and Bank Indonesia
\n(BI), credit card crime mostly occurs in one of the following
\nforms:<\/p>\n
* Lost\/stolen cards. This method was popular in Indonesia in
\n1991 and 1992, before the on-line authorization machines had been
\nintroduced. The crooks had only to imitate the signatures of the
\nreal cardholders. Stolen or lost cards are sold for between Rp
\n100,000 and Rp 150,000. The easier the signature, the higher the
\nprice. Vendors of other peoples' cards usually collude with
\ncorrupt merchants to find out whether the card has already been
\nblacklisted. The merchants know about blacklisted cards from a
\nbulletin sent to them by AKKI each week.<\/p>\n
Now, this method is on the way out because, aside from AKKI's
\nweekly bulletin, the banks also send merchants a daily blacklist
\nreport. Shopkeepers are also informed cards reported stolen or
\nlost on the same day.<\/p>\n
* Non-received cards. This scam uses cards which have not been
\nreceived by their applicants. In the U.S. banks send cards by
\npost due to the huge number of applicants. Criminals are able to
\nsteal the cards by colluding with postal workers. They need only
\nto put their signatures on the signature-less cards. The cards
\nmay then be sold or sent abroad, which explains why crime using
\nnon-received cards sometimes occurs here.<\/p>\n
In Indonesia, cases involving non-received cards are few
\nbecause banks always use couriers to deliver cards to applicants.<\/p>\n
* Counterfeit cards. Crime involving the use of counterfeit
\ncards are the most difficult to prevent and the most common form
\nof credit card fraud in Indonesia, constituting about 80 percent
\nof reported cases. Using encoding and embossing machines,
\ncriminals can change a card's embossed numbers as well as the
\nnumber on the magnetic stripe. They may imitate the number on the
\nsales receipt given by merchants who collude with them. As the
\nCitraland case shows, the on-line authorization machine may fail
\nto detect a counterfeit card.<\/p>\n
* Fraudulent applications. Some criminals lie to banks to have
\nan apparently bona fide application for a credit card accepted.
\nThey may rent a good office for a month, furnish themselves with
\nbusiness licenses issued by the government and with business
\ncards on which they are referred to as \"manager\". Then, having
\nreceived the one or more credit cards, they buy a lot of goods
\nwith it and disappear.<\/p>\n
Punishment<\/p>\n
According to AKKI data, card-issuing banks and other financial
\ninstitutions in Indonesia suffered as much as Rp 25.5 billion in
\nlosses from credit card crimes in 1993. The next year, the losses
\nwere down to Rp 12.8 billion as AKKI, together with BI and the
\npolice, commenced a coordinated effort to combat such crimes. In
\n1994, the police launched a national program to educate its
\npersonnel on credit card crime. Early this year, a handbook was
\nissued for the police on the subject.<\/p>\n
\"If previously only police officials at the National Police
\nheadquarters could handle the crime, today even officers at small
\nstations are capable of handling such cases,\" Lt. Col. Aryanto,
\nchief of the economic crimes investigation unit of the city
\npolice, told the Post.<\/p>\n
AKKI chairman Joko Sasongko Sukanto says the coordinated
\nefforts to combat credit card crime were commenced after it was
\nrealized that the crime is so serious that, apart from inflicting
\nlosses on banks, it could also affect the national economy. The
\nhigh number of credit card crimes in Indonesia may cause card-
\nissuers abroad to worry that their cards will be duplicated.
\nThus, they may advise their cardholders not to shop here with
\ntheir cards. That, in turn, would decrease the country's foreign
\nexchange earning, according to Joko.<\/p>\n
\"Today, the crime is already under control,\" Joko said.<\/p>\n
It used to be rampant, partly because the system was weak.
\nCredit card crime suspects used to be released on bail pending
\ntrial. When the day of the trial arrived, the law enforcers often
\nfailed to bring them before the court. Today, the police are
\nrarely willing to release such suspects on bail. This change in
\npolicy has helped reduced credit card crime.<\/p>\n
The decrease in credit card crimes has also been attributed
\nthe courts' newfound perception that such offenses are serious,
\nleading to harsher sentences for people convicted of card crimes.<\/p>\n
Under the Indonesian criminal code, credit card criminals face
\na maximum of six years imprisonment. The courts formerly handed
\nout sentences of between two and six months, encouraging crooks
\nto resume the activity on their release.<\/p>\n
AKKI executives believe that the Indonesian criminal code is
\nstrong enough to deter credit card criminals, provided that
\njudges mete out sentences approaching the maximum.<\/p>\n
\"Singapore and Malaysia also threaten their credit card
\ncriminals with about the same jail term. But the judges,
\nrealizing the seriousness of the crime, always sentence them to
\nnear the maximum. That's why credit card criminals from those
\ncountries now prefer committing the crime in Indonesia,\" said an
\nAKKI executive who requested anonymity.<\/p>\n
The case of Fifi Gautama, a hard-core credit card criminal,
\nmay be a good example. The woman was sentenced to only two months
\njail by the Surabaya district court in 1992 for credit card
\nfraud. She had already been in detention for that period and so
\nwas released immediately at the conclusion of her trial. In 1993,
\nshe was convicted of credit card crime again, this time in
\nJakarta, and was sentenced to less than two months imprisonment.
\nHer apparent impunity ran out last year, however, when she was
\nconvicted of another card crime on Batam Island in Riau. She is
\nnow serving a four-and-a-half year jail term.<\/p>\n
The Batam court's decision has become a landmark in
\nIndonesia's war against credit card crime. Other courts across
\nthe country are now expected to adopt a similar approach to stop
\ncrooks like those in the Citraland case.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/war-against-credit-card-swindles-not-yet-over-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}