KL blames criminals for ATM card thefts

KL blames criminals for ATM card thefts

KUALA LUMPUR (AFP): Malaysia's central bank on Saturday charged that criminal syndicates were behind a rash of automatic teller machine (ATM) thefts with "cloned" cards which has sparked fears of a run on the country's banks.

Bank Negara Malaysia chief Ali Abul Hassan Sulaiman said in a statement that its probe of the ATM card incidents revealed criminal syndicates were behind the thefts.

"Virtually all the unauthorized ATM withdrawals were due to the cloning by syndicates of the ATM cards issued by two commercial banks and one non-bank financial institution," he said.

Ali Abul, who did not name the affected banks, said his bank had been directed to take a number of measures, including enhancing ATM systems to detect and retain cloned cards.

Other steps will include improving internal controls, especially with regard to the process that generates the cards' security numbers, closely monitoring transactions, and identifying suspicious withdrawals, he said.

"Although in terms of proportion, the number of cases of unauthorized ATM withdrawals only accounts for three out of 100,000 of ATM transactions, the bank is treating this matter seriously.

"It would continue to monitor the situation closely to ensure that the problem is eradicated as soon as possible," he added.

Home Minister Abdullah Ahmad Badawi warned Friday that unless something was done to check the problem, the public would lose confidence in the institution and start a run on the country's banks.

Abdullah, who is also deputy prime minister, said that would be a disaster.

"Do not dismiss cases of unauthorized ATM withdrawals as customers' negligence but get to the bottom of the matter," he was quoted as saying by the New Straits Times newspaper on Saturday.

A senior spokesman at police headquarters in Bukit Aman told AFP a special unit of the commercial crime division has been formed to tackle the problem.

"We are investigating. Reports (of monetary losses) are increasing," he said, but was unable to provide details.

Since April 1, police have received more than 250 reports of unauthorized bank withdrawals totaling 500,000 ringgit (US$131,579).

Newspapers and the state Bernama news agency Thursday said most affected were branches of the Ban Hin Lee Bank Bhd (BHL Bank), but that other banks had also been hit.