The easiest way to defraud an automatic teller is to pick a colleague at work as the victim, observe the person keying in the Personal Identification Number, purloin the card, make a felonious withdrawal and surreptitiously return the card. If the owner leaves his jacket on his chair or her handbag by her desk, nothing could be easier – how many times a day do you check that all your cards are present and correct. And when the victim complains about the transactions, the bank insists that the poor sap must have revealed the PIN or that a household member must be responsible. No chance of redress. A hood that hid the keyboard from snoopers would eliminate the loophole, but that would cost money and all the banks are bust. Computer errors account for only a tiny percentage of so-called automatic teller machine phantom withdrawals. This is according to Dennis Whalley, solicitor for Group Action, who is acting on behalf of 250 plaintiffs in High Court proceedings against the banks, due to start at the end of August. Counsel for the defence is barrister Alistair Kelman. By representing so many people, Whalley hopes that the banks will not be able to settle out of court in their usual manner, that they will be forced to admit the imperfections of their systems and that subsequently they will have to improve security; something they have been reluctant to do as yet because of the cost. Nevertheless blips in the system are said to be rare and are generally quickly remedied because of the high level of complaints. Whalley maintains that the main reason for unaccountable losses of cash is internal fraud.
Bank staff dismissed
An estimated level of 2% of bank staff are dismissed each year for dishonest dealings, although the banks themselves refuse to release any figures concerning this. Banking ombudsman Laurence Shurman, a supposedly independent arbitrator who is paid by the banks nonetheless, attests to only one genuine case of a phantom withdrawal. He prefers to take the bank’s line that a customer must have been victim to unauthorised card use by friends, family, or work colleagues. He is also fearful that a shift in emphasis from the customer having to prove he has a genuine case to the banks having to prove that he doesn’t will result in a stream of fraudulent claims. On June 26 of this year, Barclays Bank Plc celebrated the 25th anniversary of the world’s first cash dispenser, installed at its Enfield branch. Although quoted along with Lloyds Bank Plc as the worst offender regarding phantom withdrawals, Barclays states that its machines are totally on-line with a master computer to ensure the integrity of the system against fraud. Whalley, on the other hand, claims that even German telephone cards offer a higher level of security than UK bankers cards, given the fact that the ‘phone cards are Smart Cards. He is attempting to set up an all-party lobby group in Parliament, via a parliamentary representative from the Law Society, to put further pressure on the banks and, he hopes, to bring about another government enquiry into the situation. In addition, the Law Society is contacting its European counterparts about phantom withdrawal claims and Members of Parliament are being requested to do the same with fellow politicians abroad, to assess the scale of such frauds.
