Majority of the fraud cases, some 68.6 per cent, involves debit card transactions totalling about $900,000

Electronic fraud is on the rise in the Commonwealth of the Bahamas, based on a new survey carried out by the Bahamian Central Bank.

The bank has revealed that as the use of technology to complete money transactions rises, so too have the instances of fraud with more than $5 million worth of fraud reported by commercial banks. The Bahamas Central Bank’s 2020 payments survey shows that there were 3,317 cases of cheque, debit and credit card fraud cases were noted by commercial banks.

The majority of the fraud cases, some 68.6 per cent, involves debit card transactions that totalled about $900,000. In its 2020 annual report, the Bahamas Central Bank reports that credit card fraud represented 29.8 percent of the total cases, for a corresponding value of $1 million (19.9 percent of the total value).

The report noted, “as the usage continues to diminish, the check fraud cases represented a marginal 1.6 per cent of all reported instances, but the associated value was almost two-thirds of the corresponding total ($3.2 million).”

The survey revealed that 95.9 per cent of fraudulent cases were reported in New Providence, where the majority of bank customers also reside.

Rise in payment fraud

This rise in payment fraud also came as the volume of electronic payments through the Bahamas Interbank Settlement System real-time gross settlement system (BISS-RTGS) increased by 55.7 per cent, for a total of 213,025 transactions last year valued at $45.5 billion. In 2020, BACH (Bahamas Automated Clearing House) payments, which are processed in accordance with the globally accepted National Automated Clearing House Association (NACHA) format, also trended upward.

More specifically, the volume of these transactions rose modestly by 0.7 per cent to 3.2 million, while the corresponding value increased by 13.6 per cent to $4.2 billion. While there was an increase in electronic payment transactions last year, there was a sizeable decline in the value and volume of debit card transactions.

The transaction volume was reduced by 17.1 per cent to 12.4 million transactions with values lowered 7.7 per cent at $1.8 billion. Additionally, while there was growth in Bahamians using credit cards to conduct payment transactions; there was also a decline in the number of credit cards issued last year.

New credit, an indicator of gross spending, rose by 7.3 per cent to $1.6 billion, but total repayments increased by 10.8 per cent to $1.7 billion. The number of cards issued or renewed by commercial banks declined further by 2.7 per cent to 90,093, following a 3.4 per cent reduction the previous year.

The corresponding balances owed fell by 10.1 per cent to $245.4 million. Internet banking users also registered 30 per cent growth to there now being 103,379 accounts.