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December 2, 2013

Bank Muscat to recover $39m pre-paid card fraud losses

Bank Muscat has reached an agreement with its insurers to compensate the $38.8m loss suffered from a globally coordinated fraud campaign earlier this year.

By Verdict Staff

Bank Muscat has reached an agreement with its insurers to compensate the $38.8m loss suffered from a globally coordinated fraud campaign earlier this year.

"We refer to our initial disclosure on Feb 25, 2013 in relation to the prepaid card fraud incident and would like to inform the market that the bank’s insurers have agreed to indemnify the bank’s loss in the sum of $38.8m," it said in a statement.

Last February, 12 of the lender’s pre-paid travel cards were compromised. An unnamed global cyber-crime organisation hacked into the systems of payment-processing firms used by Bank Muscat and National Bank of Ras Al-Khaimah.

After stealing card information they managed to withdraw a total of $45m from ATMs across the globe. Six members of the gang were arrested in New York last month, accused for being ‘cashers’ in the scheme.

They withdrew approximately $2.8m from cash points in various areas of the city over a few hours.

According to a statement issued by the bank, Bank Muscat is moving forward despite the setback. The statement said: "The bank will reverse the loss provision created in Q1 2013 towards this specific loss through its Q4 2013 results."

After the announcement of the indemnification, its shares rose 2% in the first minutes of trading on Oman’s stock exchange.

Related articles:

Bank Muscat takes $39m prepaid hit

Emerchants to provide prepaid cards to Queensland Treasury Department

SBA warns bank clients against card skimming in South Africa

 

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