Tue | Feb 25, 2020

Rental accounts, cheque scam rock banks

Published:Sunday | May 19, 2019 | 12:44 AMNadine Wilson-Harris - Staff Reporter

Jamaica’s commercial banks and businesses have been rocked by a swirling cheque fraud racket in which criminals rent accounts from customers and execute transactions.

According to fraud prevention expert for the Jamaica Bankers’ Association, Lloyd Parchment, the scam is one local banks are trying to tackle.

“The fraudsters recruit account holders through a process which we in the industry call account rental,” he noted.

“They come to you and, for a fee, they take possession of your debit card and your account information and then they lodge a forged cheque to it, and if the forgery succeeds, meaning that the bank doesn’t pick up the forgery, within the prescribed time, they then draw the money,” he said.

He said persons are often recruited through social media and are paid to go and open these accounts. The fraudsters then withdraw the money at an ABM.

“It is a big, big thing in the industry right now,” said Parchment.

The ballooning racket has targeted all commercial banks, The Sunday Gleaner learnt from banking insiders and police personnel, whose identity cannot be revealed because they are not authorised to speak officially.

Parchment, however, confirmed that there was a surge in the incidence of cheque fraud. He said printeries were implicated in the scheme, with fraudsters using sophisticated technology reproducing cheque leaves that were, to the naked eye, an identical match to those issued by banks, even with unerringly similar security features.

“Fraudsters don’t even try to steal cheque books anymore; they get a sample and they manufacture their own,” Parchment said.

Credit-card theft

The fraud prevention expert noted that another emerging trend was the theft and use of credit cards before they were even mailed out to customers. Most banks generally utilise the services of post offices to distribute these cards, although some, have revised policy, mandating customers to collect cards in-branch.

“They (fraudsters) then recruit persons on the inside to assist them to activate the card and then they use them. That has been happening,” he said.

While he admitted that some bank staff were involved in the fraud rackets, Parchment sought to assure that they are either fired or turned over to the police, depending on the banks’ policy.

“It is very attractive when you are earning X per month in terms of salary and a fraudster offers you that every week,” he said.

He noted that the individuals in whose names these cards were sent are oftentimes not aware of the use of their credit card until they get a bill or a call from the bank to say that they have exceeded their limit.

In response, billionaire investor and chairman of NCB, Michael Lee-Chin, resisted talk of the banking system being a soft target for fraudsters.

“We have concerns when there is illegality. We have concerns when there are thefts, but it is not to the point where we are under threat,” Lee-Chin told The Sunday Gleaner last Wednesday.

“As soon as we see a loophole, we stop it. But it is not a threat to the integrity of the [banking] system. It’s not going to the heart, right. It is important to note and correct, but the integrity of the system and the viability is not under threat.”

Attempts to contact David Noel, president of the Jamaica Bankers’ Association, were unsuccessful, as calls to his cell phone went unanswered. Noel is also president and CEO of Scotiabank.