I FIRST opened a bank account in 1961. For the subsequent 46 years, I had a trouble-free relationship with my bank. My numerous employers paid, first by cheque, then by credit transfer, my wages which were deposited to my bank account.
Life was simple, and by today’s standards, idyllic.
I wrote cheques and made cash withdrawals. My bank provided a reliable service and, in return, I made withdrawals which were covered by my account.
On Aug. 16, 2007, everything changed.
I made an on-line balance enquiry to make sure that I could cover the cost of a forthcoming expense. To my amazement, there was a P50,000 discrepancy between the amount I thought I had in my account and the balance that Banco de Oro (BDO) said I had.
What happened?
I explained the situation to the bank whose response surprised me. It firstly took the attitude that there was something wrong with my Math. Not impossible, but I double-checked before I approached the bank and found that I got my sums right.
The encounter with the bank’s local management was, therefore, unsatisfactory and, for the first time in my life, I found that an adversarial relationship between us had developed.
I found out that someone in BDO at 10:30:30 on Aug. 16, 2007, using BDO terminal 6654, was able to hack my account and illicitly withdraw P50,000. This fraudulent transaction should have been detected immediately because the telebanking account which was used, only allowed a maximum P20,000 withdrawal. Why was it possible to extract P50,000?
Furthermore, I needed to provide my personal identification number (PIN) before funds could be withdrawn from the account. I never divulged this number to anyone, so why was it possible for the illicit transaction to be successful?
Much later, I had a meeting with a BDO senior manager who patronizingly “explained” to me that the bank had ‘firewalls’ which prevented fraud. He had no reply to the demonstrable evidence that the system was vulnerable to being cheated. There were no firewalls.
In days of old, we had cash and cheques. Everything worked well.
It is my considered opinion that banks are now not able to adequately protect customer accounts from fraud. In other words, the whole banking system is weak.
The economy of North Korea is now significantly dependent on the ability of hackers to illicitly withdraw money from account holders from around the world.
I have, on several occasions, made representations to Bangko Sentral ng Pilipinas (BSP) about fraudulent transactions. Banks have regularly dismissed BSP’s enquiries by invoking the Bank Secrecy Act (RA 1405, passed in 1955) as a reason for not addressing our concerns. This is an inadequate response since I made it clear that it was my account which was fraudulently used and that I had no secrecy concerns.
I believe that BSP should seek additional powers which would enable it to instruct banks to implement systems which are more resilient to fraud./PN
