DBS Bank finds 400 cases of unauthorised withdrawals - 06Jan2012

SINGAPORE: DBS Bank on Friday said it has found 400 cases of unauthorised withdrawals from the accounts of its customers.

And it expects to pay out half a million dollars in compensation - by the end of Friday.

The bank said it has identified two ATM machines at Bugis that were compromised.

It narrowed down the affected dates to three days in late November and has contacted 2,700 customers who used the two ATM machines on those dates.

DBS said preliminary investigations found no skimming devices that could have been used to clone the ATM cards at the two ATMs.

The bank said all its ATMs have always had anti-skimming devices and preventive measures were always in place.

But checks with the victims indicated the machines were the common denominator.

The bank said the situation is contained.

It was the largest fraud case for DBS to date, the bank added. The compensation is not covered by insurance and DBS is paying from its own coffers.

Analysts said the compensation paid out to affected depositors may not cause a big dent on the bank's balance sheet.

However, the bank may suffer reputational risk and a temporary loss of confidence.

To date, DBS has over 4 million customers in Singapore and Hong Kong.

Liu Jinshu, deputy lead analyst at SIAS Research, said: "I think that the bigger impact would be on the DBS business and its reputation over the longer-term.

"We have had an ATM incident in 2010. My view is that depositors will now be more cautious towards putting all their money in one bank."

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