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$45 Million Cyber-Heist Reflects Broader Security Problems for Prepaid Industry
By Colby Adams
printThe theft of $45 million by cybercriminals exploiting and manipulating stolen prepaid card data highlights weaknesses in how financial institutions monitor the use of stored value products, say security experts. In a May 9 indictment, federal prosecutors disclosed that a group of cybercriminals accessed an India-based processor for UAE-based Rakbank in December, removed the loading limits of five prepaid MasterCard debit accounts and increased their balances to millions of dollars. The hack allowed the group to withdraw nearly $5 million from thousands of ATM machines within hours. Two months later, the group struck again by distributing the PIN numbers of...
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U.S. financial institutions are reevaluating their cybersecurity controls in light of increasingly complex online attacks aimed at stealing client funds and data, according to experts.
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As U.S. officials work to shield American prepaid cards from abuse by financial crooks, foreign-issued stored value products remain a relatively easy avenue to move money into the United States anonymously.
Government often moves slowly and (hopefully) deliberatively, but one might wonder whatever happened to those pre-paid card readers being tested along U.S. borders.
Lobbying by the world's largest stored value payment facilitator has indefinitely delayed, and perhaps permanently blocked, a plan to give customs officials the ability to read prepaid cards, say sources.
American officials will begin field-testing prepaid card readers at U.S. border stops next month as part of the lead-up to the Treasury Department regulations governing their cross-border transport, say officials.
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The U.S. Treasury Department Tuesday prescribed new compliance rules on the prepaid product industry, a sector largely unregulated despite concerns about its vulnerability to money launderers.
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Senators chastised the U.S. Treasury Department Wednesday for delays in regulating prepaid access products that can be used to smuggle drug proceeds from the United States into Mexico.
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Several banks are asking the U.S. Treasury Department's financial crimes bureau for the unthinkable: more anti-money laundering compliance responsibilities.
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The European Union proposed rules Tuesday on how electronic money might be issued, a step meant to further expand the market for prepaid and stored value payment products.