The central bank has banned BDO, Union Bank for online fraud


By Loose Wendy T. Nobel, Reporter

Its central bank The Philippines (BSP) said on Thursday it had sued BDO Unibank, Inc. for an online fraud involving a customer account in December. And UnionBank of Philippines, Inc.

In a statement, the BSP said it had completed an investigation into the incident “arising from a compromised web service” and involved unauthorized access to video accounts and transfer of funds to most Unionbank accounts.

“Based on the results of the investigation, the Monetary Board has approved the imposition of sanctions on BDO and Union Bank so that both the banks can resolve the issues expeditiously,” it said.

The sanctions emphasize the importance of “continuously improving risk management systems involved in cyber security, anti-money laundering, and financing terrorism and proliferation,” the BSP said.

Union Bank President and Chief Executive Officer (CEO) Edwin R. Bautista said the BSP had not imposed any fines.

“All the recommendations of the BSP have been implemented to avoid such incidents. There are no financial penalties. But we were asked to increase our capital charges against our operational risk, ”he said in a text message.

He said UnionBank had fully co-operated with BDO and BSP and had “frozen a lot and returned it to BDO”.

BDO President and CEO Nestor V. Tan said the bank would comply with the BSP’s ban “We will work with BSP to ensure a more secure banking environment,” he said in a Viber message.

In deciding on the ban, the BSP said it had taken into account the corrective measures implemented by both the banks in connection with the cyber incident, including the BDO’s move to repay its funds.ffected client.

“This incident is a reminder that in order to protect the integrity of our financial system and the interests of depositors, we should increase our defense against cyber-threat actors,” said BSP Governor Benjamin E. Diocono said in a statement

In December, some BDO customers went to social media to complain about the transfer of unauthorized funds from their Union Bank accounts to fictitious accounts.

The National Bureau of Investigation arrested several people accused of hacking in January, affecting more than 700 BDO clients.

The hackers stole about 1.2 million P1.2 million but could have embezzled more than the potential P50 million if the transactions had not been immediately tagged as suspicious, the NBI said.

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