CCAP: Tighten measures to stem SIM swap fraud

The Credit Card Association of the Philippines (CCAP) has urged major telecommunication players, lawmakers, and regulators to institute measures to stem the rising tide of fraudulent credit card transactions due to SIM card swap. 

In separate letters to Globe Telecom and Smart Communications, the National Telecommunications Commission (NTC), and the House of Representatives, CCAP Executive Director Alex Ilagan said: “The industry has been experiencing high volumes of fraud cases causing financial detriment. These perpetrators have carried out fraud by using the various digital payment platforms to commit crime.”

CCAP figures showed fraudulent credit card activities via remote and other digital payment channels increased by 21% in the country since the start of the global pandemic, which forced customers to shift to remote and other digital payments to deal with face-to-face restrictions.

The association, comprising the country’s 18 major credit card players, said the highest number of incidents of credit card fraud losses today is the “Virtual Account Take Over” scam. This involves taking over and gaining access to One Time Passwords (OTPs) of unknowing customers, enabling fraudsters  to perform OTP validated  online transactions.

Raising the red flag, CCAP urged the telcos to tighten their existing Know Your Customer (KYC) process when onboarding new prepaid and postpaid customers, particularly when it comes to the ID verification process when customers request to change mobile numbers when declaring a lost or stolen mobile unit.

“We respectfully request that this be addressed urgently. Perpetration of a successful unauthorized SIM swap will affect both the telcos’ and the banks’ customers, resulting in financial losses, loss of public trust and confidence, and close scrutiny from the regulators,” CCAP wrote.

CCAP also pushed for the immediate enactment and implementation of House Bill 5793, also known as the “Subscriber Identity Module (SIM) Card Registration Act,” and Senate Bill 2395, the “SIM Card Registration Act,” which were approved on third and final reading in both Houses of Congress. The bills seek to establish a system of sale and registration of SIM card and help law enforcers track down those who use mobile phones to engage in criminal activities.

“To date, there are no existing laws which protect the consumers from this mode of attack from the fraudsters. We believe that the passage and implementation of this law will greatly deter the activities of the fraudsters as they will now have accountability from the use of the then registered SIM cards,” CCAP said.

The association also urged the NTC to establish a recourse mechanism for Filipino consumers to actively report telephone numbers being used for malicious intents. “We believe that this will effectively facilitate a convenient, standard, and reliable reporting platform with a consistent, trustworthy process where consumers report telephone numbers being used by fraudsters or by some random persons offering to click links or awards/prizes or even offer jobs, without these being triggered by consumers. This standardized reporting mechanism is absent in today’s environment which leads hesitancy from the victims to properly report incidents to their respective banks or telecommunication providers,” CCAP said in its letter to the NTC.

Raising the urgency of the proposed measures, CCAP said: “The fraudsters’ techniques and equipment are continuously being enhanced and innovated on a daily basis. Many of these techniques and equipment are dependent on the fact that they need to communicate with the consumer with virtual anonymity. Combating financial crime is a shared responsibility among all concerned industries, as well as the government; thus, we are asking for help in this continuous fight against these progressive fraudsters.”

CCAP and its members continue to educate its credit cardholders on other fraud types through its #FightBudolMovement campaign on social media, in coordination with the Bangko Sentral ng Pilipinas.

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