National / Crime & Legal

Japan's banks and police step up efforts to counter refund scams involving ATMs

Kyodo

Financial institutions and police are stepping up efforts to protect the elderly from refund scams involving ATMs, including the use of systems that automatically suspend transactions if suspicious activity is detected.

According to the National Police Agency, losses through refund scams — cases in which victims receive calls offering refunds via ATMs but end up transferring money to the fraudsters — reached ¥1.07 billion between January and June. The figure remains high but marked a significant drop from the same period a year ago, as financial institutions have set more stringent limits capping transfer amounts.

“We hope to prevent crime by cooperating with companies,” an investigative source said.

In February last year, Joyo Bank, based in Ibaraki Prefecture, began using a system that automatically brings a transaction to a halt when a person tries to make an ATM payment while speaking on a mobile phone. In refund scams, victims are often deceived because they believe they will receive refunds by following instructions from perpetrators over the phone.

The system, developed by Hitachi Ltd., is activated when it detects radio waves emitted from mobile phones. In one case, the system prevented an elderly man from being deceived in a refund scam by a person claiming to be a city official.

“The system has been effective to a certain extent,” said Makoto Chiba, an official at Joyo Bank.

Tokyo’s Metropolitan Police Department, together with security equipment maker Iwata Electric Co., developed a voice warning system that can be attached to ATMs. When it detects radio waves from a mobile phone, the system will say, “Are you following instructions because you were told you can receive a refund? That is fraud. Call (the emergency number) 110.”

The Bank of Saga is working with software development company Optim Corp. to train artificial intelligence to deal with such scams. It started an experiment in July in the hope of creating a system that will alert bank staffers when cameras installed in the ATM area detect suspicious actions.

They hope to improve the system’s accuracy at assessing human gestures so it can be put it into practical use.

Kimiaki Nishida, a professor at Rissho University, has called for establishing more measures to tackle fraud.

“People who fall victim to fraud often do not listen to the advice of others, saying, ‘I’m OK.’ I hope more financial institutions will introduce a system that makes (ATM) usage impossible when users are speaking over the phone.”

GET THE BEST OF THE JAPAN TIMES
IN FIVE EASY PIECES WITH TAKE 5