Bank customers have money withdrawn overseas

At least eight bank cardholders of the Bank of Chengdu, a regional commercial bank, have had money taken from their accounts through unauthorized use of their cards recently, exposing security risks related to bank card technology, the 21st Century Business Herald reported on Wednesday.

"The cases of unauthorized use of the debit cards have happened quite often recently, especially in the first quarter," an unidentified bank staff with knowledge of this matter was quoted as saying.

"Cardholders who traveled to Thailand and other Southeast Asian nations are advised to either exchange their cards at the bank's counter or change their card passwords at the bank's ATMs," a Bank of Chengdu customer service representative told the Global Times on Wednesday.

The police found that eight instances of unauthorized use of a bank cardholder's debit card were conducted in Russia through ATMs, withdrawing a total of 57,500 rubles, or 9,873.91 yuan ($1,591).

The cardholder surnamed Chen said he never lent his debit card to anyone and had no access to mobile payment services. He last used his debit card to take some cash from an ATM in Phuket Island, Thailand, in mid-December 2013 during a tour.

At least eight cardholders of the Bank of Chengdu told the newspaper about similar cases, all of which took place between March 18 and 29.

The cases are reportedly still under investigation.

The majority of the victims found their money had been taken from their debit cards in Russia, even though none of them had ever been there. A cardholder surnamed Huang, who went to Malaysia instead of Thailand in August 2013, also suffered card account theft, according to the newspaper.

The Bank of Chengdu has reportedly initiated a contingency plan. For card transactions made in Russia and Poland, the bank must confirm with the cardholders before the transaction is validated.

"The fundamental reason for the theft is that bank cards with magnetic stripes can be easily cloned and forged," Samuel Sinn, risk assurance partner at PricewaterhouseCoopers China, told the Global Times in a written note on Wednesday.

Most banks use outdated magnetic stripe technology, which is easier for fraudsters and hackers to steal information, such as credit card numbers, by using secret devices hidden in ATM machine slots.

A massive data breach related to outdated bank card technology was exposed in the US in December's holiday season, when unknown hackers stole data from up to 40 million credit and debit cards used at the US' third-largest retailer Target Corp.

China's central bank has been pushing for smart chip embedded bank cards in recent years, required IC bank cards to be used for transactions in economically developed regions in 2015.

The progress of commercial banks in adopting the new technology has so far been slow given the high costs.