Change is on the cards

PUBLISHED : Saturday, 28 August, 2004, 12:00am
UPDATED : Saturday, 28 August, 2004, 12:00am

Spoiled by living in a relatively crime-free nation for so long, Japanese are renowned for being inattentive and careless. Women's purses are often in full view, and bags are left on the ground or on shelves in crowded public places. But these days, people are starting to be more careful at bank cash machines, and are checking their account balance more frequently.

This change in behaviour is because of the rise in card fraud, which, in some cases, has resulted in millions of yen being stolen from a person's account, even though they still have their card and have not disclosed their PIN to anyone. Criminals only need to get hold of the card for a few seconds, then use a cigarette-packet-sized 'skimmer' to read the account details and PIN from the magnetic strip on the back, which they then transfer to a fake card. Police believe the cards may be taken from an unsuspecting person's bag or purse, 'skimmed' and then replaced, or taken from a locker or safety deposit box.

This type of fraud is not new in Japan, but previously it involved only credit cards. It was thought that the magnetic strips on cash cards did not contain PIN details. But that was found not to be the case following revelations in May by popular singer Mie - one half of the duo Pink Ladies - that over the previous few months more than 10 million yen (HK$708,000) had been stolen from her account. Similar cases came to light, and investigations revealed that older cash point cards, some from 15 years ago, did indeed contain PIN data on the magnetic strip. Newer cards are protected by an anti-skimming security system.

Even so, if skimmers can get the PINs from elsewhere, they can still withdraw cash on fake cards. Many people's PIN is based on their birthday or phone number, making it easier for criminals to trace. Other people provide their PIN when replying to e-mail inquiries from fraudsters pretending to be a bank or credit card company. Sophisticated technology - such as bugging devices which tap into phone lines transmitting cash card data - is opening new horizons.

With no insurance for cash card fraud, unlike credit card fraud, banks are refusing to compensate victims. One former publishing company executive in Tokyo recently filed a lawsuit against two banks - the Tokyo Mitsubishi and Mitsui Sumitomo - claiming that they were negligent in the theft of 32 million yen from his account, which was taken from their cash machines. The criminals made 139 withdrawals at different cash machines in just 10 days in March.

Banks are now planning to use smart cards, with microchips instead of a magnetic strip, in the near future. Some are even studying the possibility of using fingerprint technology.