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Home Articles ATM Fraud: Is it a problem in Africa or not?
ATM Fraud: Is it a problem in Africa or not? E-mail
Monday, 25 January 2010 00:00

ATM Fraud: Is it a problem in Africa or not?

Add the words "ATM fraud in Africa' in your Google search bar and see what the results are. 

You'll find ATM fraud articles written about South Africa, Nigeria and one isolated article about a Bulgarian couple arrested in Tanzania who stole over USD 53 000 in illegal ATM transactions according to the Tanzanian Police. The question "what is happening in the rest of Africa" presents itself.

Mr. Johan Barnard, Managing Member of Perficio Prosperitas Training Institute based in South Africa was approached by certain financial institutions in East Africa and asked to arrange a training programme for banks and law enforcement agencies to address ATM fraud prevention strategies.

He said that whilst researching ATM fraud in Africa he was shocked as to the magnitude of ATM fraud in Africa.  He said that it is clear that ATM fraud in Africa is a flourishing business not only in South Africa and Nigeria but the whole continent. 

There are no clear statistics available as to the annual losses that Africa has incurred over the last five years due to ATM fraud, but if one looks at the annual report by the European Network and Information Security Agency (ENISA) that found that annual cash machine losses in Europe is approaching €500 million, with a total of 10,302 skimming incidents reported in Europe in 2008, a 149 per cent rise in ATM attacks, one can only estimate it runs into millions of dollars.

Speak to financial institutions in Africa and it becomes apparent that ATM fraud had dramatically increased over the last two years and most acknowledge that not enough is done to combat this problem. One problem is that the banks are not sharing information regarding ATM fraud. In isolated cases there is some form of communication or sharing of information, but it is not the norm.

Exacerbating the problem is the mere fact that banks are scared of the so called "stigma" it may cause if openly admitting that they are under attack by ATM fraud syndicates. Mr. Barnard was told by one bank that they are not even doing the bare minimum to prevent ATM fraud as they don't wish to be liable and clients must keep their card and pins safe.

He also said that this is exactly the kind of attitude that must be changed however the majority of banks acknowledge that they don't know enough about ATM scams and how to combat them. According to Mr. Barnard "all banks and law enforcement agencies need to start working together and not independently, as many of these syndicates operate across borders. The parties involved must share information, understand fraud scams, and strategise on how they can combat ATM fraud jointly".

According to research there is a major shortage of expertise in ATM fraud prevention in the African continent. "We had to secure the services of an international expert based in the United Kingdom who has 20 years experience in the field of ATM fraud risk management. Mr. Douglas Russell, Director of DFR Risk Management Ltd, will bring the banking industry a fresh updated and in-depth look into the finer art of combating ATM fraud and equip the attendees of our course with the necessary skills that they need to keep their clients as safe as possible."

In December 2009 Perficio Prosperitas Training Institute and DFR Risk Management hosted their first annual Combating ATM Fraud in Africa event in Zanzibar, Tanzania and between March 15th and 18th 2010 the training will be held in Nairobi, Kenya. If you require information about this or future events please just contact Johan Barnard.






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