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No penalties for BDO over card skimming cases

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THE BANGKO SENTRAL ng Pilipinas (BSP) has not imposed any sanctions on BDO Unibank, Inc. over reported card skimming cases back in June.

The listed lender has not received any penalties from the regulator after the bank was found to be compliant with BSP regulations, a senior official said.

Instead, affected depositors will be covered by payouts under the liability shift framework enforced by the central bank for compromised accounts which have not yet migrated to the more secure Europay Mastercard Visa (EMV) chip cards.

Back in June, the Sy-led bank confirmed at least 95 reports of card fraud after at least seven automated teller machines were reportedly tapped into using skimming devices that stole client data and passwords. Skimming victims will be reimbursed after the bank completes its investigation, a bank executive had said during a Congressional inquiry.

The central bank has not imposed a penalty on BDO as the card fraud cases were “handled properly,” following an investigation rolled out by the regulator. The central bank found BDO “compliant” with existing regulations, particularly the liability shift framework which covers ATM and card-based transactions.

The new rule places the burden on banks in cases of theft or losses coming from card skimming if it has not yet adopted the microchip technology, in a bid to boost consumer protection.

The BSP has also required banks to set up reserves for potential card fraud in its balance sheets to make sure that it will bear the burden of covering possible theft cases for non-EMV cards still in use.

The fraud loss provision will be a mandatory buffer that banks have to set aside, similar to loan loss reserves for soured debts. The provision should be in place and reported quarterly starting Sept. 30.

All banks and card-issuing firms need to fully deploy EMV cards and terminals by June 30, 2018. – Melissa Luz T. Lopez

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