Fraudulent Digital Transactions: A Growing Threat to Financial Stability in Curaçao and Sint Maarten

Warning Issued by Central Bank

The Central Bank of Curaçao and Sint Maarten (CBCS) has issued a warning to consumers and businesses on the island, alerting them to the growing threat of fraudulent digital transactions. These criminal activities pose a significant risk to financial stability, as stolen data is exploited to make unauthorized transactions.

Consequences of Fraudulent Activities

Fraudulent activities not only result in direct financial losses for consumers but also cause:

• Increased transaction declines
• High chargeback rates
• Additional expenses for merchants

These malicious actions compromise the integrity of our financial systems, disrupt legitimate business operations, and erode consumer trust in digital transactions.

Protection Measures

To combat this growing threat, the CBCS recommends the following measures to protect against fraudulent activities:

For Consumers

• Be aware that no financial institution will ever ask you to disclose personal or bank information via email or phone call. Contact your financial institution if you’re unsure about the legitimacy of a caller or email.
• Regularly monitor your financial statements to identify any unauthorized transactions and report them immediately to your financial institution.
• Set up transaction alerts with your financial institution, which can provide real-time notifications of account activity, allowing for timely detection of fraudulent transactions.
• Utilize secure payment methods such as:
  • Two-factor authentication
  • HTTPS protocols
  • Virtual Private Networks (VPNs) when accessing public or unsecured Wi-Fi networks

For Businesses and Technology Partners

• Implement robust fraud detection and prevention mechanisms, including:
  • Address Verification Systems (AVS)
  • Velocity checks
  • Payment Card Industry Data Security Standard (PCI DSS) compliance
• Web developers are urged to ensure payment gateways are equipped with the latest fraud detection technologies.

Importance of Collaboration

The CBCS emphasizes the importance of collaboration in combating cybercrime and remains committed to ensuring a secure transaction environment for consumers and businesses on the island. To stay informed about the latest security threats and prevention techniques, individuals are encouraged to regularly visit:

• The CBCS website
• Social media platforms
• Those of their local bank or service provider
• Financial education platforms

Related News: National Ordinance on Supervision of Payment Service Providers

Separate legislation for Payment Service Providers (PSPs) is currently in legislative process to be enacted. The National Ordinance on the Supervision of Payment Service Providers (NOSPSP) aims to provide a stronger regulatory framework for PSPs, further enhancing the security and stability of our financial systems.