Bank Muscat hit by $39m pre-paid card fraud

Bank Muscat hit by $39m pre-paid card fraud

Oman's Bank Muscat says crooks have managed to compromise a dozen pre-paid travel cards, racking up RO15 million (US$39 million) in fraudulent transactions.

No customers have suffered any financial loss and no other credit or debit cards issued by the bank have been affected, says a statement published on the Muscat Securities Market site.

"The Bank is working with all stakeholders to further investigate and to establish any losses arising from these transactions," says the statement issued on Monday.

With the loss representing around 10.5% of Bank Muscat's estimated 2013 earnings, the news hit its share price, which fell 4.3% before a partial recovery on Tuesday.

This prompted a second statement, saying: "We are exploring all avenues to minimise the impact on our shareholders and will pursue the various options available to the bank."

Comments: (2)

A Finextra member
A Finextra member 28 February, 2013, 19:06Be the first to give this comment the thumbs up 0 likes Smacks of an inside job to me. How on Earth their systems were not safe-guarded against this is beyond me. Twelve cards? Who configured their system? A work experience kid or someone who really didn't know what they were doing. Needs a full, transparent and public investigation - with published findings.
Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 01 March, 2013, 18:27Be the first to give this comment the thumbs up 0 likes

That's US$ 3.25M per card. Since when did prepaid cards support this kind of stored value? Even before the crooks entered the scene, it seems like Bank Muscat's prepaid card program was compromised by extremely incomptent design that permitted such a thing to happen in the first place.