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Ukrainian Banks Suffer Losses Because of Fraudulent Operations with Bank Cards


Ivan Bozhko, attorney at Ilyashev & Partners Law Firm
Source: Censor

From year to year Ukraine experiences growth of cashless monetary operations: while making payments for the goods and services our fellow citizens give more and more preference to bank cards and NFC-payments via mobile devices. But it must be remembered that with this “blessings of civilization” such a negative thing as cybercrime goes hand in hand. In particular, according to the in formation provided by the National Bank of Ukraine in 2017 this type of crimes caused losses for the sum equivalent to USD 6 million.

Regardless of the multiple warnings describing the measures of prevention against the cybercriminals, however, the lawbreakers carry on stuffing their pockets by resorting quite evident and simple tricks. The main problem of solving such types of criminal offences is the fact that the criminals often leave no physical traces of their crimes, as well as resort to various ways of making their actions anonymous. The methods of searching for criminal offenders and the ways of proving their guilt directly depends on the techniques they resorted to achieve their unlawful goals.

The key factor on which the final result of the investigation mainly depends is represented by the promptness in filing the crime complaints to the law-enforcement authorities by the crime victims. For example, nowadays in our country there are widespread instances of fraudulent episodes when the criminal offenders dial numbers of their potential victims and, allegedly acting on behalf of the financial institutions, receive the confidential information of the owners of the bank cards under the various pretexts.

In order to track down such kind of offenders the law-enforcement officers apply to the investigating courts for the permit to receive the information from the mobile communication operators about the gadgets used for making certain calls. Such information makes it possible to quite precisely establish the location of the fraudsters, track down their movement, a swell as receive information about all their outgoing connections, i.e. about other unlawful activities committed by them. In certain cases the offenders make calls from the “hidden numbers” but this also does not pose any problem as soon as it will be sufficient to request information from the mobile communication operator about the incoming calls made to the phone of the “victims”. Further to this the law enforcers will perform the final investigative actions in the form of the searching the so-called “call-center”, seizing the mobile devices and arresting the persons accessory to the offences.

As regards to the fraudulent operations with the ATM machines when the offenders withdraw money using the duplicate of the victim’s bank card or another equipment allowing to perform unlawful operations with another persons’ money.

First and foremost, the law enforcers must request the information from the bank about the machine from which the monetary assets were withdrawn. The matter is that all the ATM machines are equipped with video surveillance cameras which may help identifying the persons who unlawfully withdrew the money.

In addition, the big cities and towns have such a wide-spread network of surveillance cameras that, as a rule, it is possible to follow the route of the offenders, starting from the place where the crime was committed and up to the place of their residence. Again, in this case the rapidness is the key factor because any delay will play into the hands of the offenders (for example, the surveillance cameras may have a limited period of storage of the video materials).

The problem is that the owners of such establishments may be unwilling to cooperate with the law-enforcement authorities in the questions related to provision of voluntary provision of video records. In such cases an investigator must receive an order from the investigating judge for the receiving access to the temporary access to the electronic media on which the required recordings are stored.

Sometimes during the investigation of such kind of crimes the investigators may find it useful to resort to dactylography (science of fingerprints). But this may rather be applied to the ATM machines located in the places with low attendance as soon as otherwise it will be impossible to establish which fingerprints belonged to certain criminal offenders.

Another wide-spread type of fraud is represented by the use of “twin” web-sites of the banking institutions. After accessing such web-sites the unsuspecting victims may voluntarily enter the information allowing to establish access to their internet-banking system. Such web-sites have the similar design style and have a little difference in the web-site name.

For solving such types of crimes the law-enforcement agencies initially establish the hosting-providers of the “twin web-sites” which makes it possible to further demand the information about the owners of the mentioned web-sites.

As a rule, registration of the hosting services requires execution of the agreement on provision of services for the registration of a domain name, administration and hosting. It means that a hosting provider either voluntarily, or on the basis of an order issued by an investigating judge may provide the information about the owner of a web-page, as well as the information which may facilitate the search of the offenders.

The problem in this situation may be the registration of a web-page into the name of a “straw party” which may interfere with the establishment of causal connection between the result of the criminal activities and a certain person.

In relation to proving the guilt of the cybercriminals (as, in general, in any other category of criminal offences) everything depends on the evidential base gathered by the law-enforcement authorities in the course of investigation activities.

It means that the final result almost entirely depends on the skills of an investigator and his procedural chief in the case of investigation of a certain type of fraud with electronic payment systems.

The fact that our Government draws enough attention to the growing problem of cybercrimes may be regarded as a positive moment. The law-enforcement bodies establish new specialized departments and increase the quantity of personnel of the existing departments for fighting such types of crimes.

At the same time irrespective of the level of the effectiveness of the crime management systems, the most effective method of minimizing losses from the activities of cyber criminals is represented by conscious and careful attitude of people towards safekeeping and distribution of their confidential information.

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