Pakistani officials warn of Chinese gangs running ATM skimming rackets

Pakistani officials warn of Chinese gangs running ATM skimming rackets
One of the Chinese nationals arrested in Karachi. (Photo courtesy: FIA)
Updated 25 January 2018

Pakistani officials warn of Chinese gangs running ATM skimming rackets

Pakistani officials warn of Chinese gangs running ATM skimming rackets

KARACHI: Officials in Karachi believe a Chinese criminal network is skimming ATM machines in Pakistan.

Two Chinese nationals were caught by the manager of a local bank in downtown Karachi last week and handed over to the police and the Federal Investigation Agency (FIA).

“For a moment, I thought we may face embarrassment when we were on our way to arrest them,” said Salman Waheed, a police officer at the station house to which the two thieves were taken. “We are usually expected to help and protect Chinese nationals in Pakistan.”

China is Pakistan’s major regional ally and the opening of the China-Pakistan Economic Corridor (CPEC) has seen an influx of Chinese nationals into the country. And Bilal Ahmed, investigating officer at the FIA, claims that Chinese gangs are operating an ATM skimming racket in Pakistan.

In ATM skimming, hidden electronic devices are attached to ATMs which steal personal information from cards inserted into a fake card reader placed over the machine’s actual card slot.

“They send their men to commit such crimes in this country,” Ahmed told Arab News.

There have been several other cases in which Chinese nationals have been arrested for ATM theft in Pakistan in recent times. In June 2016, the FIA arrested a Chinese national while he was removing a skimming device from a cashpoint. Two more Chinese nationals were arrested in February 2017, after they installed a skimming device and a spy camera in the ATM kiosk of a local bank.

On Jan. 13 this year, police arrested three Chinese nationals in Karachi’s Defense neighborhood, recovering 2.3 million rupees. Two other members of the group evaded capture.

According to FIA officials, the Chinese Consulate provided legal support to its nationals in both of the earlier cases, although they stress that no undue pressure was put on them to be lenient in either case.

Deputy Chief of Mission at the Chinese Embassy in Islamabad Lijian Zhao declined to comment on the latest arrest.

Dr. Asad Malhi, senior police superintendent of Clifton, Karachi, believes “a large criminal network is sending these people to our country on multiple-entry business visas.”

“We are not dealing with four or five people,” he told Arab News, adding that Islamabad should “go for more surveillance in order to stop foreigners from committing crimes.”

“In the years to come, the number of Chinese people living in Pakistan is going to rise very sharply and it’s important that proper procedures should be in place to ensure there is no abuse of privileges by visitors to Pakistan,” Dr. Khurram Hussain, who has written extensively about CPEC, told Arab News.

“We can see that checks and balances have clearly failed in these recent cases in which Chinese people have been involved in criminal activities,” he added.

Islamabad-based cyber security expert Haroon Baloch warns that ATM-skimming technology has the potential to wreak havoc on Pakistan’s financial infrastructure.

“All the banks are connected with one another through State Bank of Pakistan (SBP), the country’s central bank,” he said. “Had the skimmers succeeded in their venture for long enough, it would have jeopardized our financial institutions.”

But SBP spokesman Abid Qamar told Arab News that there are a number of safeguards in place to protect banks and their customers.

“To safeguard depositors from fraudulent transactions, SBP has issued specific regulations for the security of payment cards and Internet banking, under which banks are required to develop and implement comprehensive framework for risk assessment, implementation of controls and monitoring,” he explained.

He added that debit cards with magnetic strips, which store customers’ account details, are particularly vulnerable to skimming and cloning. But debit cards complying with EMV (Europay MasterCard Visa) standards, featuring a chip, offer two-factor authentication and are now internationally recognized as the most effective countermeasure against card fraud.

“Accordingly, the SBP issued a circular that instructed banks to develop infrastructure for EMV Compliance and issue such cards by 30th June 2018,” Qamar said.

Minister of State for Interior Affairs Tallal Chaudhry confirmed that Pakistan has a “lenient” visa policy for Chinese people “due to our cordial relationship with that country.”

However, he added: “That does not mean that we will allow criminal elements from China to creep in and commit crimes here. Those who are involved in any crime in Pakistan are not only prosecuted under our legal system, but are also blacklisted. None of them will ever be granted a visa to this country again.”