National Bank Chairman Andriy Pyshny reported on whether restrictions on card transfers solve the problem of drops, and how the implementation of a special register is progressing.
National Bank Chairman Andriy Pyshny reported on whether restrictions on card transfers solve the problem of drops, and how the implementation of a special register is progressing.
«There would be no drops if banks properly investigated the client’s profile during onboarding and took into account his transaction history,» Andriy Pyshny said in an interview with Forbes.
Restrictions on card transfers came into effect on October 1, 2024. Since that period, according to the NBU chairman, along with the reduction in transfers using card details, the volume of transfers in the SEP between different banks has increased by almost UAH 6.2 billion. However, commenting on the situation further, he noted that the volumes have stabilized and seasonal fluctuations remain. But they are still being analyzed by the NBU.
However, Andriy Pyshny recalled that the NBU had previously warned that this limit alone would not be able to solve the problem of drops. According to him, this requires a set of measures, including changes to the legislation.
One of the measures, he said, is the introduction of a special registry that will help detect fraud, the development of which is still underway. However, many issues still need to be resolved for this, in particular those related to banking secrecy.
«The issue turned out to be more complicated than we thought,» the NBU chairman added.
According to Andriy Pyshny, additional time is needed to develop the draft law so that the concept of this law acquires a clear outline. He assumes that they will manage in two months.
We remind you that we wrote about what drops are and how the scheme works here. In addition, since February 1, after the memorandum came into force, according to which banks determined the appropriate procedure for checking clients, new restrictions on money transfers have been in effect .
Drops (from the English «to drop» — to throw) or «money mules» are people who, for a fee, provide attackers with access to their bank details: to cards / accounts, including PIN codes and access to Internet banking. There are those who knowingly sell their details and access, and those who act under the influence of deception and social engineering. The reward for droppers is paid depending on how their bank account will be used: these can be transactions between accounts, cash withdrawals at ATMs, replenishment of the account through payment terminals, etc. Usually, droppers are paid from $20 to $100 depending on the type of service, in some places the payment may be calculated as a percentage of the volume of transactions. The organizers of drop groups, having received access to the accounts and all the necessary details, use various software and hardware complexes to automate the process of transfers, aggregation and distribution of funds between accounts in the scheme.
Drops can make transfers in different countries and on behalf of different people. Therefore, fraudsters can easily move funds around the world, remaining «invisible». «Money mules» can be involved on an ongoing basis (when a person transfers the received funds to where they are told, keeping a certain percentage for themselves, figuratively speaking, «transfers» criminal money with their legal card) or «one-time» (when the «mule» transfers bank cards issued to him for a one-time fee, including PIN codes and access to web banking), and then the shady guys drive illegal funds through this legal gateway in their shady schemes. These can be bets in underground online casinos, payment for left-hand excise goods, tax evasion, cash withdrawals, hiding profits, paying for drugs, and so on.
In many countries, «dropping» is a criminal offense. In Latvia, the penalty for participating in the scheme is up to 10 years.
