Sat | Feb 27, 2021

Banks flee mail service to curtail card theft and cloning

Published:Sunday | January 17, 2021 | 12:05 AMHuntley Medley - Associate Business Editor
Jerome Smalling, president of the Jamaica Bankers Association.
Jerome Smalling, president of the Jamaica Bankers Association.

An apparent increase in incidents of theft and cloning or attempted cloning of debit and credit cards sent to bank customers through the mail has led to commercial banks abandoning the Jamaica Postal Service as a method of delivering cards.

Customers are now required to collect new or replacement cards in branches, with some banks racking up increased costs to send cards door-to-door by courier service, including overnight service to clients in Jamaica and overseas.

Banking sources say the problem, which is a long-standing one, reached troubling proportions recently, leading to financial institutions imposing the operational changes to reduce their exposure to this kind of fraud. With the changes, some bank customers have been experiencing and complaining of significant delays in receiving debit and credit cards, particularly renewals to replace expired cards.

Bank customers have complained to the Financial Gleaner about the inconvenience of the requirement to travel to bank branches to pick up cards, particularly at a time when some banks have been reducing the number of branches with the closure of rural outlets and when wait times have been lengthened as a result of COVID-19 mitigation measures.

One customer was incensed at what the person described as the run-around received from one bank while trying to report attempts by unknown persons to activate a credit card sent through the mail but which was never received. Another customer noted that banks have been placing responsibility for the security of credit and debit cards on customers even when cards sent by banks through the postal service have been intercepted, stolen, and illegitimate attempts made to activate them.

Commercial banks generally say the incidence of mail card theft and cloning is not prevalent, with at least two indicating that they are not now experiencing the problem as the issuing of cards is now done entirely through their branch networks.

The police information network indicated that checks would have to be made to ascertain whether there have been any reports from banks or customers of mail theft involving bank cards and if there is a record of the amounts involved in any such reports of fraud.

Jamaica Bankers’ Association, JBA, president Jerome Smalling has acknowledged the problem, telling the Financial Gleaner in emailed responses to queries that “from time to time, we do field such reports” and that the matter has been discussed by the association.

“The problem of mail theft has existed as long as there has been a postal service, Banking services are only being recently affected,” according to the JBA head, who said that the bankers’ association has discussed the matter with the postal service, which trades as Jamaica Port.

“As a government agency, the JPC has assured us it remains committed to the highest level of service delivery and takes all reports seriously and supports police investigations into all reports. We are also in no way blaming the JPC as an institution,” Smalling said. JPC is a reference to the Postal Corporation of Jamaica.

Attempts to get a comment from Jamaica Post have been unsuccessful. Postal Corporation CEO Michael Gentles was said to be out of office this past week and questions sent to him by email have not been answered.

The JBA president maintains that the problem is “a limited issue”, which has affected a small part of the banking public. The association, he says, does not have numbers pertaining to the scale of the problem or any estimate of losses involved.

He insists, however, that JBA members are taking the matters of fraud and fraud protection seriously.

“Financial institutions are always reviewing their policies and practices to strengthen fraud protection, and as such, generally, the industry has limited customer impact by implementing the steps presented earlier though individual experiences of loss may occur. We have a very responsive banking industry which values its customer base and works assiduously to secure their deposits and help to grow wealth,” the JBA president said.

While contending that banks have not permanently ruled out the mail service as a method of delivering cards to customers, Smalling confirmed that in-branch pick-up was now the primary mode of delivering cards although affected financial institutions are said to be responding to the problem in different ways.

Smalling, too, is underscoring customer actions in stemming fraud involving bank cards.

“The truth is, the greatest protection from fraud is customer knowledge and awareness. The customer must secure their cards and data physically as well as within the cyberspace. They must ensure the devices they use are updated regularly with anti-malware/spyware protections and not share their passwords, PINs, accounts, or cards,” he said.