Skim scam

-A A +A

By Neil Honeyman

An Independent View

Wednesday, March 5, 2014

IN MARCH 2013, Bangko Sentral ng Pilipinas (BSP) Governor Tetangco announced the formation, within BSP, of a “Financial Consumer Affairs Group” (FCAG) whose role, according to Tetangco, is to help bank customers “obtain appropriate redress when they have been victimized through no fault of their own...” This includes problems involving ATM scams.

“Help” is the operative word. BSP is leaving it to the discretion of individual banks whether to refund the victims of automated teller machine (ATM) fraud. With respect, Guv, aren’t you being somewhat pusillanimous? You have a Constitutional mandate (Sec 20 Art XII) “…shall have supervision over the operations of banks…” We believe you should exercise this mandate in the context of fraudulent ATM transactions. Supervision includes, where necessary, direction. Banks need to be directed.

The essence of ATM fraud is that the fraudster is able to “skim” the data from the magnetic stripe of our ATM card while we are doing a cash withdrawal from an ATM machine. If, in addition, by the use of Closed-Circuit Television (CCTV) he is able to see us key in our Personal Identity Number (PIN), he is able to obtain the information from which he can do fraudulent transactions. It is all too easy and apparently 1,272 cases of ATM card fraud were reported in 2013 involving P220 million. This amounts to a whopping P173,000 per case.


At issue is the question as to who is responsible for what. The bank is responsible for the ATM machine. If it has been tampered with and is capable of skimming data from our card, the bank is solely responsible. It is not for the customer to carry out a forensic examination of the bank’s ATM equipment every time he carries out a cash withdrawal. We are concerned that press releases from banks warn customers to take every precaution to ensure that the machine is operating properly. This is clearly an attempt by banks to offload its responsibility onto the customer. We believe BSP should be very firm with the banks in this regard.

On the other hand, the customer is responsible for keeping his PIN secret. No one else should know, not even family members. Especially family members! Sadly, some ATM frauds occur when a sibling or a cousin has got hold of our ATM card and had knowledge of our PIN.

More can be done to focus responsibilities on the appropriate place. The ATM is the bank’s responsibility. Keeping the ATM card safe and the PIN secure is the customer’s responsibility.

This focus should cause disputes between banks and their customers to be defused in most cases.

Banks like to have the upper hand. It is high time that BSP clarifies its position and to insist that there are circumstances where it is within its Constitutional right to instruct banks to make appropriate redress when the customer has been demonstrably wronged. This is well within BSP’s supervisory authority.

BSP’s culture of seeking to persuade and mediate has its place, but firmness is required also. Banks are much more “thick skinned” than many other organizations in the retail sector and it is now time for them to be subject to more discipline from BSP.

BSP’s Cabinet consists of Monetary Board members. Some of these are more concerned, and rightly, with strategic issues of international finance. But BSP’s role is also to ensure that customers are treated fairly. We were saddened that Monetary Board member and Sun.Star columnist Ignacio R. Bunye resigned from the BSP recently. His was a six-year appointment due to expire in July but, due to personal reasons, he did not complete his term.

His writings show that he would like us to be more financially literate so that we can make advantageous decisions related to our limited funds. We agree. Financial literacy also helps when we are dealing in adversarial situations with obdurate and high-handed banks. We look to the BSP to “show its fangs.” PNoy needs to replace Bunye with a Constitutionally-mandated “natural-born Filipino citizen, of known probity, integrity, and patriotism” [Art XII Sec 20]. We hope PNoy will also find someone who has consumer protection uppermost in his mind. Banks need to be treated more firmly by BSP. The downtrodden need more support.

A recent article in BusinessWorld stated that Bunye’s appointment (by Gloria Arroyo in 2008) was a political appointment – leading us to infer that it was inherently suspect. We disagree and see that there is a need for BSP to be more consumer conscious.


Readers who are having difficulties with their bank and believe they are not obtaining appropriate redress in situations where they have been treated fraudulently should email, with full details, to


Cesar Ritz, of hotel fame, said: “The customer is never wrong.” Our banks, in adversarial situations, say: “The customer is never right.”

Published in the Sun.Star Bacolod newspaper on March 05, 2014.


DISCLAIMER: Sun.Star website welcomes friendly debate, but comments posted on this site do not necessary reflect the views of the Sun.Star management and its affiliates. Sun.Star reserves the right to delete, reproduce or modify comments posted here without notice. Posts that are inappropriate will automatically be deleted.

Forum rules: Do not use obscenity. Some words have been banned. Stick to the topic. Do not veer away from the discussion. Be coherent and respectful. Do not shout or use CAPITAL LETTERS!
  • Festivals
  • Obituary
  • Sinulog
  • Filipino Abroad
  • Sunstar Multimedia
  • Papal Visit
  • Pacman blog
  • Philippine Polls
  • Calamity Report
  • ePaper
  • goodearth
  • SunStar Celebrity
  • Technology
  • Sun.Star Zup!
  • Pnoy
  • tell it to sunstar
  • Habemus Papam