Omani Bank Stung by Travel Card Fraud (Feb. 26, 2013)
Feb. 26, 2013
Oman’s largest bank said a dozen of its prepaid travel cards were compromised outside of the country. Bank Muscat will take an impairment charge of up to 15 million rials (US$39 million) as a result of the unspecified fraud—a figure representing more than 10 percent of the bank’s latest annual earnings.
The bank, however, made clear that none of its other customers were affected by the situation. “No customers have suffered any financial loss and no other credit or debit cards issued by Bank Muscat have been affected,” the bank said, adding that it is “working with all stakeholders to further investigate and to establish any losses arising from these transactions.” On the London Stock Exchange, shares of the bank’s stock fell nearly 5 percent on Monday after news of the fraud broke, but recovered somewhat in early trading on Tuesday.
Prepaid travel cards have become popular in the Middle East, where members of the rapidly emerging affluent customer segment seek easy methods of making purchases abroad. However, the risk of fraud has also been on the rise as the region’s banking sector has yet to fully establish advanced security measures such as chip-and-PIN authorization, according to some industry observers.