How to protect your bank  accounts from fraudsters

What you need to know:

  • A Pin’s importance cannot be overstated. For instance, a local bank in a statement on Wednesday asked its clients to always be cautious when transacting in public places.

BY  BUSEIN SAMILU                                                                               & PRISCILLA MALOBA                                            

A video of Farook Ssekandi, a client of a local bank, on October 10, went viral across different social media platforms where he accused the bank of stealing Shs10 million from his account.

However, the bank blamed the loss on phone theft, saying in a statement: “We wish to reiterate our message to all our customers that in the event of loss of their phone, they should immediately report to the bank through our 24/7 customer helpline 0312327000.”

A little over a month on, details of how this case was finally settled remain unclear. The lender declined to comment on the matter, citing the client confidentiality rule.

So what exactly do we know?
We know that the online banking platform of the local bank in question has over the years been dogged by claims such as Mr Ssekandi’s. 

In August of 2021, for instance, the lender—to its dismay—discovered that up to 11 of its customers collectively lost Shs25 million. 

Edith Nakacwa, Nathan Muhindo, Flavia Atunkwase, Flavia Adong, Joanita Walubiri, and Brian Ntale took to both mainstream and social media to voice their predicament before the bank refunded their money.

The bank is far from being an outlier. Last month, another local bank was forced to refund Shs100 million after one of its clients—an elderly woman—had her personal identification number or Pin curiously reset. 

The bank arrested its staff in the aftermath of the theft before asking its clients to report any suspicious transactions on their accounts or messages sent to their phones.

What is a Pin and why is it important?
Experts, banks and telcos unanimously agree that 99 percent of fraud conducted on people’s accounts is through access to Pins. 

A Pin is always a four or five digit number that unlocks one’s account in the bank or mobile money.

A Pin’s importance cannot be overstated. For instance, a local bank in a statement on Wednesday asked its clients to always be cautious when transacting in public places.

“In the event that you lose or misplace your mobile device/phone/ATM card, please inform the bank immediately to block the channels, be cautious of scammers, do not engage any non-bank employee to assist in carrying out transactions,” the bank said.

What defences do fraudsters look to breach?

Fraudsters, according to experts, exploit two areas, including persuasion and breaking into cybersecurity. The latter can be breached even if the Pin holders protect them. Dr Aminah Zawedde, the permanent secretary (PS) at the ICT and National Guidance ministry, says fraudsters always look to be a step ahead.

“Just like the way you put security on your homes, you build a house, put a gate, build a fence, deploy a security guard, close your main door with padlocks, put CCTV cameras, lock you bedroom, among other measures,” she said, adding that the metaphor applies to “the same way you should be protecting your details while transacting online. Don’t leave your accounts open in cafes, protect your credentials because hackers are not sleeping.”

The previously mentioned bank relatedly cautions the public to be cautious with the websites they use, especially while doing online shopping.

“Fraudsters still use the old tactic of fake money deposits, so customers should stay ahead of them by immediately hanging up when the fraudsters call or text but also never sharing their bank details,” the bank advised.

How widespread is the problem?
Telcos and their customers have also been known to be victims of both online hackers and persuasive fraudsters. MTN Uganda and Airtel Uganda told Saturday Monitor that they have registered cases of their clients being fleeced by fraudsters.

“At MTN we have persistently told our clients that none of our employees will ever call you to ask you about your Pin. You must only put in a Pin in the transaction which you have initiated,” Ms Rhona Arinaitwe, the senior manager of communication and stakeholder management officer at MTN Uganda, said.

“There is no way someone will withdraw money from your account; unless you have either shared with them your Pin or you have been persuaded to enter it into your phone after they have initiated a transaction in their end,” she added.

Relatedly, Mr David Birungi, the public relations manager of Airtel Uganda, advised clients to change their Pins at least once a month so that fraudsters do not easily access their money in the event that their gadgets are lost.

“We have witnessed cases where fraudsters have gone to extreme cases of attacking their victims, breaking into their cars, homes, cutting off their bags just to gain access to their phones and laptops whose passwords they know,” he said.

“In real life we do not greet every stranger we meet. Even politicians at an election rally can’t do it. In the same vein, we should not respond to each link, message, video that pops up on our screens. That single action of ignoring these messages will save us the pain of losing our data and hard-earned money,” he added.

Has the growing popularity of cashless transactions added to the problem?

Yes. The Bank of Uganda annual report for the 2022/23 financial year indicates that mobile money transactions grew by 22.6 percent to Shs191.3 trillion from Shs156 trillion the same period last year. This is not different from the banking sector whose online banking arm has also grown.

While releasing the bank’s financial results for the period ending December in May this year, Mr Anthony Kituuka, the managing director of Equity Bank, said that 94 percent of their transactions are now conducted through digital channels.

This growth has however attracted fraudsters who steal from unsuspecting individuals. Police in its 2022 annual Crime and Road Safety Report indicated that 82 cases of bank and other corporate frauds were registered in 2022 compared to 102 cases registered in 2021.

The same report also showed that cybercrimes increased by 10.8 percent from 258 cases in 2021 to 286.

What needs to be done?
Dr Aminah Zawedde, the PS at the Ministry of  ICT, said more awareness is needed to ensure that the public can know all the tricks being used by the scammers and fraudsters. 

“The government through our ministry has a plan of ensuring that we create an initiative of cyber awareness as well as ensuring that people are empowered on cyber security by taking on awareness and there are various programmes in various institutions that are doing the same,” she said. 

Dr Chris Baryomunsi, the ICT and National Guidance minister, reiterated his PS’s message. 

“Most banks have a provision where if there is a transaction that is being carried out on your account, you get a notification on your phone in the form of a message,” he said, adding: “We advise customers to ensure that the phone numbers they used to register with their bank account are on all the time so that you can detect any transaction on your account on time.” 

Mr Jossy Muhangi, the communications officer at Financial Intelligence Authority (FIA), a government body mandated to fight money laundering, which is always thriving in financial institutions, said banks should report suspicious transactions to their customers as the first step to stop fraud.

“Banks do have money laundering control officers who are in charge of reporting any suspicious transactions on customers’ accounts so they should be alert. Customers should avoid carrying huge sums of cash, resist help by strangers inside the bank’s and ATMs,” he said.