Fraud Using Bank Payment Cards: A Way for Financing of Terrorism and Separatism
DOI:
https://doi.org/10.31767/su.2(101)2023.02.01Keywords:
fraud, bank sector, financing of terrorism and separatism, bank payment cards, financial transactionsAbstract
It is substantiated that intensification of terrorism and separatism in Ukraine in time of war rises the priority of problems related with fight against their financing. The banking system, offering a diversity of financial services and tools, is an attractive object for using fraudulent schemes. Money laundering using bank payment cards and with further financing of terrorism and separatism is a significant component of criminal activities. The article’s objective is to explore the main categories of fraud using bank payment cards as a way for financing of terrorism and separatism, and to determine methods for elimination of these activities. The research process involved methods of induction, deduction, system approach, logical generalization, graphic visualization. It was revealed that the fraud was taking new and more sophisticated forms and ways, of which the most common ones were skimming, cash trapping, fishing, or phone call to obtain secret data. It is argued that the principal methods for minimizing the fraud with bank payment cards is raising awareness and financial literacy of bank clients in issues related with various categories of fraudulent actions, as well as modernization and upgrading the software protection system in a bank.
It is determined that the current phase of digitalization in the bank sector creates new risks of fraud using bank payment cards for financing of terrorism and separatism. It is substantiated that the system designed to counteract financing of terrorism and separatism by way of fraud involves two mechanisms: identification, by bank employees, of persons applying to banks for financial services, and surveillance of financial transactions made by these persons, to detect the ones that may involve financing terrorism and separatism. The risk zone in Ukraine spreads on the financial transactions that, not being subject to identification, may be used to finance terrorist actions or support separatism. It refers to the financial transactions made by use of payment systems.
Downloads
References
2. Dubrovyk-Rokhova, A. (2017). Shcho potribno znaty pro “fishynh”, “vishynh” i “kesh-treppinh”? [What do you need to know about “Phishing”, “Vishing” and “Cash Trapping”?]. Den – Day, 18–19. Retrieved from https://day.kyiv.ua/uk/article/ekonomika/shcho-potribno-znaty-pro-fishyng-vishyng-i-kesh-trepping [in Ukrainian].
3. Dominova, I. V. (2017). Ryzyk shakhraistva v umovakh funktsionuvannia elektronnoho bankinhu [The fraud risk under conditions of electronic banking]. Biznes-navihator – Business navigator, 4, 92–98. Retrieved from http://business-navigator.ks.ua/journals/2017/43_2_2017/20.pdf [in Ukrainian].
4. Zaritska, O. S., & Kotsan-Olinets, U. Ya. (2019). Vydy shakhraistva z bankivskymy kartkamy ta sposoby protydii yikh proiavam [Types of Fraud with Banking Cards and Ways to Counteract Its Manifestations]. Visnyk Lvivskoho torhovelno-ekonomichnoho universytetu. Yurydychni nauky – Herald of Lviv University of Trade and Economics. Legal sciences, 8, 95–100. Retrieved from https://doi.org/10.36477/2616-7611-2019-08-10 [in Ukrainian].
5. Naumenko, S. H. (2017). Shakhraistvo u sferi obihu bankivskykh platizhnykh kartok [Fraud in the field of circulation of bank payment cards]. Proceedings from Koruptsiina zlochynnist u mizhnarodnomu vymiri: formy, metody ta zasoby protydii: Mizhnarodnyi kruhlyi stol (9–10 lystopada 2017 r.) – International round table. (pp. 183–187). Kyiv: Natsionalna akademiia vnutrishnikh sprav. Retrieved from https://www.naiau.kiev.ua/files/naukova-diyalnist/naukovi-zaxodi/zbirnuki/2017/mater_verstka_091117.pdf [in Ukrainian].
6. Yaremenko, R. (2019). Fishynh z yurydychnym prysmakom: yak ne vtrapyty na hachok? [Phishing with a legal flavor: how not to get caught?]. Liga Zakon. Retrieved from https://biz.ligazakon.net/analitycs/186819_fshing-z-yuridichnim-prismakom-yak-ne-vtrapiti-na-gachok [in Ukrainian].
7. Ofitsiine Internet-predstavnytstvo Natsionalnoho banku Ukrainy [Official website of the National Bank of Ukraine]. bank.gov.ua. Retrieved from https://bank.gov.ua/ [in Ukrainian].
8. Praktychni rekomendatsii. Ofitsiinyi sait Prominvestbanku [Useful_ recommendations. Official website of the Prominvestbank]. www.pib.ua. Retrieved from https://www.pib.ua/private/pocket_offers/useful_information/recommendations/ [in Ukrainian].
9. Pyvovarov, V. V., & Tereshchenko, K. V. (2015). Shakhraistvo iz bankivskymy kartkamy: okremi pytannia viktymolohichnoi profilaktyky [Bank card fraud: specific issues of victimological prevention]. Karpatskyi pravnychyi chasopys – Carpathian low journal, 10, 132–137. Retrieved from https://dspace.nlu.edu.ua/bitstream/123456789/9954/1/Pivovarov_132-137.pdf [in Ukrainian].
10. Pro platizhni posluhy: Zakon Ukrainy vid 30.06.2021 r. № 1591-IX, stanom na 01.04.2023 r. [On payment services. Law of Ukraine of June 30, 2021 No. 1591-IX, as of April 1, 2023]. zakon.rada.gov.ua. Retrieved from https://zakon.rada.gov.ua/laws/show/1591-20#Text [in Ukrainian].
11. Rekomendatsii dlia znyzhennia ryzyku shakhraiskykh operatsii: Lyst Natsionalnoho banku Ukrainy vid 04.07.2018 r. № 57-0009/36366 [Recommendations for reducing the risk of fraudulent transactions. Letter of the National Bank of Ukraine of July 4, 2018 No. 57-0009/36366]. zakon.rada.gov.ua. Retrieved from https://zakon.rada.gov.ua/laws/show/v3636500-18 [in Ukrainian].
12. Bondaruk, T., Momotiuk, L., & Zaichko, I. (2022). Budgetary policy of Ukraine in time of challenges and its impact on financial security. Statistics in transition new series and Statistics of Ukraine, 23 (5), 185–208. Retrieved from https://sit.stat.gov.pl/SiT/OnlineFirst/05_Taisiia%20Bondaruk%20%20sit%2023%205p.pdf
13. Chaudhary, K., Yadav, J., & Mallick, B. (2012). A review of Fraud Detection Techniques: Credit Card. International Journal of Computer Applications, 45 (1), 39–44. Retrieved from https://research.ijcaonline.org/volume45/number1/pxc3878991.pdf
14. Delamaire, L., Abdou, H., & Pointon, J. (2009). Credit card fraud and detection techniques: a review. Banks and Bank Systems, 4. Retrieved from https://www.researchgate.net/publication/40227011_Credit_card_fraud_and_detection_techniques_A_review
15. Edge M., & Sampaio P. (2009). A survey of signature based methods for financial fraud detection. Journal of computers and security, 28 (6), 381–394. Retrieved from https://doi.org/10.1016/j.cose.2009.02.001
16. Startuvala informatsiina kampaniia #ShakhrayGoodBye: nahaduiemo pro vazhlyvi pravyla platizhnoi bezpeky [The information campaign #FraudsterGoodBye ShakhraiGoodbye was launched: we remind you about the important rules of payment security]. (2023). Official website of the National Bank of Ukraine. bank.gov.ua. Retrieved from https://bank.gov.ua/ua/news/all/startuvala-informatsiyna-kapaniya-shahraygudbay-nagaduyemo-pro-vajlivi-pravila-platijnoyi-bezpeki [in Ukrainian].
