Nagoyo

Aside from phishing and smishing, people now have to worry about outright hacking of their bank’s system, and the theft of their deposits.

This kind of cyber crime is not new. We remember one of the most brazen, when the Federal Reserve Bank of New York lost to hackers in February 2016 a staggering $101 million in the Bangladesh central bank’s account.

Using the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network, hackers successfully used five of 35 fraudulent transactions to transfer the $101 million, of which $81 million was laundered through casinos in the Philippines. The $21 million traced to Sri Lanka has been fully recovered by Bangladesh. But it has recovered only $18 million of the $81 million transferred to four personal accounts in the Philippines under fictitious individual identities, opened in Rizal Commercial Banking Corp. as early as May 15, 2015.

The former manager of RCBC’s branch on Jupiter Street in Makati, Maia Santos Deguito, was convicted of money laundering in March 2019 and sentenced to four to seven years in prison.

On Aug. 5, 2016, the Bangko Sentral ng Pilipinas slapped a whopping P1 billion fine on RCBC for its role in the heist. RCBC bowed to the order. Bangladesh Bank sued RCBC for “massive conspiracy” in 2019 before a court in New York. RCBC filed a counter-suit, denying the charge and accusing Bangladesh Bank of defamation.

To this day, the hackers who stole the funds of Bangladesh have not been identified. The country is said to be one of the top targets of hackers. The Philippines, once described as a financial black hole especially for money laundering, must be another top target.

At least BDO Unibank, where some account holders found their deposits ranging from P25,000 to P50,000 transferred to a Union Bank account under the name Mark Nagoyo, has committed to reimburse the victims, several of whom have reportedly closed their BDO accounts.

For larger amounts, the Philippine Deposit Insurance Corp. can protect only up to P500,000 in bank deposits per account holder.

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People are now sharing horror stories about their banking experience. There are minor amounts, which can go unnoticed by individual depositors, but which can amount to a substantial sum if stolen from thousands – such as the P1,200 annual safety deposit box fee, which a depositor learned after three years had been pocketed by a bank employee.

The amounts stolen from the BDO accounts were reportedly converted into digital or cryptocurrency – voodoo for the average bank depositor especially those belonging to the older generation.

Even younger folks for whom digital operations are intuitive can be conned, such as the billionaire scion who shot himself after reportedly losing P200 million dabbling in bitcoin.

Before the pandemic, an expert briefed us in The STAR newsroom about bitcoin and cryptocurrency. His explanation was simple, tailored for tech-challenged financial illiterates like me. But I still emerged from the briefing befuddled by the topic.

So my simple reaction to the story about BDO was to bring my credit card to an ATM machine and check if my account was among those hacked. Late Monday night it was hard to find a working ATM of BDO; they were not only offline, but metal shutters had been rolled down to cover the entire machines. I finally found one in operation, at a 24-hour Alfa Mart branch, where I learned that my account was safe… so far.

A colleague who wrote about the story said that changing your ATM PIN won’t work, since the attack was directed not at any account in particular, but at the bank itself. He said one way of protecting deposits is to disengage from online banking for now, until the banking system has dealt with the problem.

My mother’s bank deposits are safer; all her transactions are done in person and recorded in a passbook.

Obviously, this kind of banking is cumbersome and, in the time of COVID, risky. But in the time of bitcoin and cryptocurrency, returning to the widespread use of passbooks no longer sounds like a complete joke. Cyberspace has facilitated so many things – including the spread of fake news and black propaganda, rewriting of history, bullying, porn and digital thievery.

Digital and basic financial literacy subjects will have to be included in formal education curricula, starting in grade school. They can be stand-alone subjects, or woven into science or math classes.

For the generation that grew up using rotary phones and manual typewriters, adult digital and financial literacy courses can also be offered, and made accessible for all income levels.

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My trust in the banking system has already been shaken by my 10 percent loss this year in an investment / insurance scheme of one of the country’s banking giants.

From the reactions to my previous article on the subject, I am surprised to learn that even several people I thought were financially savvy have lost their hard-earned money to similar investment schemes of other major banks.

I have since received some useful tips on what to do with my investment, but I’m wondering if simply keeping my life savings under my mattress is the best option under the circumstances.

One thing is certain: investing in bitcoin is out of the question for me.

Experts say our country has accomplished cyber sleuths who can track down the BDO hacker. If they find him, they should lock him up and throw away the key.

The creep even has a sense of humor in his choice of the account surname – Nagoyo – Pinoy slang for being duped. The more accurate name is manggogoyo – the one who does the duping.

The banking industry is built on public trust. Anyone who shakes that trust is endangering not only one bank but the country’s financial system.

When Nagoyo and his accomplices are caught, they should be indicted for economic sabotage and locked up for life.

In the meantime, Nagoyo and his cohorts are ­laughing all the way to the bank.