The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

International fraud is increasingly hitting Bahamian banks and their customers, a Cabinet minister yesterday disclosing data breaches at major US retailers had cost one local institution $341,644 in its last financial year.

Hope Strachan, minister of financial services, said that due to increasing fraud, Bahamian commercial banks had been forced to take “as many measures as possible” to prevent and mitigate relatdd losses.    

“The statistics from one of our primary international commercial banks indicate an alarming trend,” Mrs Strachan said.

“For  fiscal year 2014, November 1, 2013, to October 31 2014, one of our leading commercial entities had total fraud losses in the sum of $341,644. That was broken down as debit card fraud, $202,070; credit card fraud was $85,544; and fraudulent cheques, $54,000.

“The significant debit and credit card losses were as a result of a data breach of two major retail stores in the United States. We see the cross-border effects of the use of credit cards and how it affects our local banking sectors.”

During a presentation in Parliament on the Banks and Trust Companies Amendment Bill, Mrs Strachan said that while customer verification procedures by the banks have been criticised as overkill by many, the ‘Know Your Client’ (KYC) policy was aimed at protecting people’s financial assets.

She added that international policing agencies such as the Organisation for Economic Co-operation and Development (OECD), the Organisation of Eastern Caribbean States (OECS), the Financial Action Task Force on Money Laundering (FATF), and the Caribbean Financial Action Task Force (CFATF) required that every financial institution implement KYC policies.

“The very onerous and cumbersome practice of verification of identity by multiple means has caused consternation among ordinary working class people, who simply want to negotiate their salary cheques, or make relatively small deposits to their accounts or pay their loans and mortgages,” Mrs Strachan said.

“Notwithstanding the need to strike such a balance, the overarching objectives should always be the safety and security of the sector to ensure sustainability for generations to come.”