More than $5 mil. worth of fraud reported by commercial banks

As the use of technology to complete money transactions rises, so have the instances of fraud, according to The Central Bank of The Bahamas, which yesterday revealed that more than $5 million worth of fraud instances were reported by commercial banks.

The Central Bank’s 2020 payments survey shows that there were 3,317 cases of check, debit and credit card fraud cases processed by commercial banks, the majority of the fraud (68.6 percent) involving debit card transactions that totaled about $900,000.

“Credit card fraud represented 29.8 percent of the total cases, for a corresponding value of $1 million (19.9 percent of the total value). As the usage continues to diminish, the check fraud cases represented a marginal 1.6 percent of all reported instances, but the associated value was almost two-thirds of the corresponding total ($3.2 million),” data in the CBOB’s 2020 Annual Report reveals.

“The survey revealed that 95.9 percent of fraudulent cases were reported in New Providence, where the majority of bank customers also reside.”

This rise in payment fraud also came as the volume of electronic payments through the Bahamas Interbank Settlement System real time gross settlement system (BISS-RTGS) increased by 55.7 percent, for a total of 213,025 transactions last year valued at $45.5 billion.

“In 2020, BACH (Bahamas Automated Clearing House) payments, which are processed in accordance with the globally accepted National Automated Clearing House Association (NACHA) format, also trended upward. More specifically, the volume of these transactions rose modestly by 0.7 percent to 3.2 million, while the corresponding value increased by 13.6 percent to $4.2 billion,” the report states.

“Declining use of checks – with the exception of large value transactions – continued, with the number of instruments contracting by 35.9 percent to 1.4 million, extending a 9.8 percent falloff in the previous year. Likewise, the related value fell by 36.3 percent to $4.6 billion, in contrast to the prior year’s slight uptick of 0.2 percent to $7.2 billion.”

But while there was an increase in electronic payment transactions last year, there was a sizeable decline in the value and volume of debit card transactions, which reduced by 17.1 percent to 12.4 million transactions, with values lowered 7.7 percent at $1.8 billion.

Additionally, while there was growth in Bahamians using credit cards to conduct payment transactions, there was a decline in the number of credit cards issued last year.

“On net, credit card balances were repaid in 2020. New credit, an indicator of gross spending, rose by 7.3 percent to $1.6 billion, but total repayments increased by 10.8 percent to $1.7 billion. The number of cards issued or renewed by commercial banks declined further by 2.7 percent to 90,093, following a 3.4 percent reduction the previous year, while the corresponding balances owed fell by 10.1 percent to $245.4 million,” the CBOB report states.

“In terms of the breakdown, the number of issued cards with spending limits of under $5,000 declined by 6.5 percent to 58,327, while the aggregate debts on these accounts fell by 8.8 percent to $92.5 million. In contrast, the number of cards with limits between $5,000-$10,000 grew by 4.4 percent to 18,830, however, the value of unpaid balances decreased by 9.4 percent to $66.4 million. In a similar trend, accounts with limits of over $10,000 rose by 6.7 percent to 12,936, still with a related value decrease of 11.9 percent to $86.5 million.”

Internet banking users also registered 30 percent growth to there now being 103,379 accounts.

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source https://thenassauguardian.com/more-than-5-mil-worth-of-fraud-reported-by-commercial-banks/