Indonesia Still Struggling With Electronic Fraud: BI

By webadmin on 10:25 am Jul 06, 2012
Category Archive

Dion Bisara & Grace Dwitya Amianti

Fraud cases are casting a shadow over the banking industry, a central bank official said on Thursday, and reported cases are likely only the tip of the iceberg.

So far this year, Bank Indonesia has received reports on 1,009 fraud cases involving electronic payments, including with credit cards and through online banking, for a total estimated loss of Rp 2.37 billion ($254,000), said Ronald Waas, a central bank deputy governor who oversees the accounting and payment system.

“I think the loss may be greater than what has been reported because banks are reluctant to report fraud cases, worrying such cases could make them appear unsafe,” he said at a seminar.

He said 458 fraud cases involved transactions over the telephone or on the Internet, for a total loss of Rp 545 million.

The second-most prevalent type of fraud was identity theft, he added, with 405 cases for a total loss of Rp 1.14 billion.

“Our banks are weak in validating and identifying customers,” he said.

The cards themselves also play a role. Indonesian debit cards use magnetic strips rather than chips, making data theft easier.

Bank Indonesia will require all banks to use six-digit PINs on credit cards by the end of 2014 and chip debit cards by the end of 2015 at the latest.

The country’s electronic transactions, including with debit cards, credit cards and electronic money, rose 25 percent in May to Rp 268.4 trillion from a year ago.

Djoko Purbo, a police commissioner on banking, the economy and special crimes, said foreign hackers were also targeting Indonesia’s Internet banking services.

“The attacks have been increasing in terms of quantity and quality,” he said. “There are indications local hackers cooperate with their accomplices abroad.”