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Combating fraud and bribery

With increasing use of information technology in banking, e-crime constitutes an evolving threat. We are keeping pace, drawing on sophisticated technology and experienced staff to detect and react to e-crime quickly and effectively.

Online scams such as phishing, vishing and SMSishing are escalating year-on-year in some of our markets. Scams include fraudulent log-in pages for Internet banking and requests for customer details delivered through spam email.

Shutting down phishing sites

In 2010, we implemented a Fraud Monitoring Tool accompanied by an Operations Response Service provided by an external supplier. The tool searches the Internet for phishing sites with log-in pages bearing Standard Chartered’s name or logo. Where these are detected, a rapid and effective take-down procedure is triggered. Our external supplier works in global partnerships with Internet service providers and domain registers to achieve an efficient response.

Around 500 phishing sites were detected and shut down over the year with no loss to our customers. Many of the sites were detected before being reported by customers or the public at large. This is how we practise and advocate our Customer Charter, our promise to protect the interests of our customers.

Detecting debit card transaction fraud

In 2010, we rolled out a new system to detect debit card transaction fraud. Following the system’s introduction, our Fraud Risk Control Team detected numerous fraudulent ATM withdrawals on skimmed (illegally copied) Standard Chartered debit cards. This then developed into a substantial fraud attack as the skimmed cards were used fraudulently for ATM withdrawals in Africa, the Middle East, Eastern Europe and the Caribbean. Due to a rapid response, over 1,000 attempted withdrawals were stopped and a potential loss of over USD2 million averted. Affected customers were contacted and their cards replaced with no loss to them, and minimal losses to the Group.

UK Bribery Act 2010

On 8 April 2010, the UK Bribery Act 2010 was passed by Parliament. It is expected to come into force in the first half of 2011, and is one of the strictest pieces of anti-bribery legislation in the world. As the Group is incorporated in the UK, our preparations for the coming into force of the UK Bribery Act 2010 have been extensive and Group-wide. Our procedures have incorporated UK Ministry of Justice guidance, which includes six high level principles as the basis on which to construct an effective anti-bribery programme.

The Group is also a member of, or contributes to, a number of organisations aiming to fight bribery. These include the British Banker’s Association, the International Chamber of Commerce, the Wolfsberg Group and the United Nations Global Compact Working Group against Corruption. In this last initiative Standard Chartered is one of four contributing banks.

Combating fraud and bribery: Case study

Helping to uncover Singapore debtor fraud

Early in 2010, we received information that an entity was fraudulently collecting debts owing to a separate company and then depositing the proceeds into two bank accounts held with Standard Chartered in Singapore.

As a result we reviewed the bank accounts, which showed odd activity including multiple unrelated business transactions and funds moving in and out of the accounts over short time periods. With supporting documentation, we submitted a suspicious transaction report (STR) to the Commercial Affairs Department (CAD) of the Singaporean Police Department.

Shortly after the STR, CAD issued a seizure order on both accounts. Our timely provision of information and support led to the successful arrest and prosecution of one of the directors for assisting another to retain benefits from criminal conduct. We received a letter of appreciation from CAD in late 2010, recognising our assistance.

Annual Report and Accounts 2010