$7.8m caught in payment frauds

Central Bank of the Bahamas.

Central Bank of the Bahamas.


Tribune Business Editor


Some $7.8m worth of payment fraud complaints were made in 2018, the Central Bank of The Bahamas has revealed, with debit cards accounting for almost 60 percent of cases.

The bank and trust company regulator’s 2018 annual report, released yesterday, disclosed that many of the debit card-related fraud complaints stemmed from “a major card skimming scheme” that hit one Bahamas-based financial institution last August.

This involves the use of a skimming device to capture all the information stored on the debit card’s magnetic strip. This is then copied on to a blank card’s magnetic strip, enabling thieves to steal a person’s identity and make purchases or withdraw cash in the actual account holder’s name.

“The Central Bank began compiling data on the number of fraud cases in 2017, as part of a heightened focus on consumer protection,” its annual report said. “A preliminary analysis of the bank’s 2018 payments survey showed that there were 3,507 reported cases of fraud processed by commercial banks for cheques, debit and credit cards, valued at $7.8m.

“Disaggregated by type, cases involving debit cards accounted for 59.5 percent of the total at 2,086, with an associated value of $3.2m. This reflects in part exposure to a major ‘card skimming’ scheme that affected one domestic entity in August.

“Cheque fraud represented 14.6 percent of the aggregate number of cases at 514, for a corresponding value of $2.5m (32.5 percent of the total value). Further, the number of cases involving credit cards stood at 907, which constituted 25.9 percent of the total and an associated value of $2m.”

The Central Bank added that, not surprisingly, more than 75 percent of fraud cases were reported in New Providence as The Bahamas’ largest population centre.

Elsewhere, the Central Bank said it had custody of some 41,459 dormant account facilities containing balances worth $108.8m as at year-end 2018. These are accounts where there has been no activity for at least seven years, with Bahamian and US dollars accounting for 89.1 percent of this sum.

Legislative reforms enacted last year, though, now allow the government to take ownership of “specific categories of dormant funds” held by the Central Bank for the purposes of financing its fledgling disaster relief fund.

“Low-value accounts of $500 or less would immediately cede to the Government on transfer to the Central Bank,” the latter’s annual report said. “In accordance with the Act, as at end-December 2018 an estimated $40.95m in dormant funds was due to be remitted to the Government against the applicable 10-year custodial period expiration.

“In 2019, the Central Bank will introduce additional governance oversight structures for dormant account administration. This will include increased public disclosures regarding assets in custody, and public awareness campaigns around funds recovery and ways to minimise lapses into account inactivity status. The Bank has also committed to developing an automated enquiry tool to help the public to search for suspected dormant assets.”


truetruebahamian 3 years, 3 months ago

Another reason to stay far far away from BOB shareholding - and possibly the buy in for Government buildings which we own, but for which they are responsible. I want pre 1967 to come back.


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