Jamaican Banks Gear Up to Combat Internet Fraud

As concerns over internet scams continue to plague Jamaica, local commercial banks are preparing to implement more stringent measures to prevent fraud and protect customers’ financial information.

Stricter Measures Ahead

According to Dane Nicholson, chairman of the Jamaica Bankers Association’s (JBA) anti-fraud committee, new measures are expected to be in place by March. The JBA reported that Jamaican commercial banks lost a staggering $133 million in 2022 due to internet banking fraud, representing an annual increase of 21% and a nearly 300% surge over the past five years.

Rise in Reported Cases

The rise in reported cases, totaling 742 in 2022, underscores cybercriminals’ evolving tactics to exploit unsuspecting customers. The Major Organised Crime and Anti-Corruption Agency (MOCA) is currently investigating several internet banking schemes, including one that allegedly fleeced millions of dollars from around 150 customers at multiple financial institutions.

Increased Vigilance Needed

Nicholson warned that the losses could worsen in 2024, with global cases of social engineering scams like phishing, smishing, and romance scams increasing significantly. To counter this trend, financial institutions are adjusting their internal controls to make their systems more robust and introducing measures to protect customers from themselves.

New Standards for Transactions

Two-factor authentication for all transactions is expected to become the standard across the commercial banking sector, according to Nicholson. Additionally, the JBA will be increasing customer education around internet scams as the first line of defense against social engineering schemes.

Partnership between Financial Institutions and Customers

“We need a partnership between financial institutions and their customers,” Nicholson emphasized. “If the financial institutions continue to strengthen their internal mechanisms around their different systems, but customers continue to divulge sensitive information to cybercriminals, then it brings the investments by financial institutions to naught.”

Customer Education Crucial

The issue of internet banking fraud has left many customers frustrated and vulnerable. For instance, public sector employee George Rivera was scammed out of $293,000 after falling victim to a phishing email that appeared to be from his bank.

Call for Greater Awareness

Rivera’s case remains unresolved, with no update from the police’s Fraud Squad despite reporting the incident to his bank and the authorities. His experience highlights the need for greater awareness and vigilance among customers to prevent such scams.

Government Reports

The Jamaican government has reported that commercial banks have lost a total of $405 million through 1073 reported cases of internet banking scams since 2018, with MOCA estimating losses from cyber and cyber-enabled schemes could exceed $1 billion. Law enforcement sources claim some banks may be opting to quietly pay back customers rather than filing reports with the authorities.

Dispute over Reporting

However, Nicholson disputed this assertion, stating that most financial institutions have taken necessary steps to report these matters to law enforcement. He predicted that “early in the new year, you will see some arrests in relation to cybercrime matters that have been reported by various institutions.”

Conclusion

In light of the escalating threat posed by internet banking fraud, it is crucial for Jamaican banks and customers alike to remain vigilant and proactive in combating this scourge.