BSP slaps sanctions on BDO, UnionBank over massive online fraud

MANILA, Philippines — The Bangko Sentral ng Pilipinas has finished its investigation into a massive online fraud in December last year that affected hundreds of clients of BDO Unibank Inc., which will face sanctions together with Union Bank of the Philippines.

“Based on the results of the investigation, the Monetary Board (MB) approved the imposition of sanctions on BDO and UBP to ensure that both banks will swiftly address the issues the BSP noted,” the central bank said in a statement on Thursday.

The BSP, however, did not disclose the sanctions that will be imposed on the two banks.

Known as the “Nagoyo” scam, BDO account holders in mid-December last year reported unauthorized transactions involving tens of thousands of pesos. BDO said the incident “affects a 10-year old web service that is for phase out.”

The National Bureau of Investigation said the scam started from phishing, which eventually led to the accounts of clients being compromised. The NBI, however, said the suspects were not able to cash in the stolen money as their transactions were flagged by UnionBank, the receiving bank.

Following the heist, BDO said it reimbursed the stolen money of close to 700 clients.

The Department of Justice found probable reason to charge four individuals over the massive online banking fraud.

“This incident is a reminder that we should continue to enhance our defenses against cyberthreat actors to protect the integrity of the financial system and the interests of depositors," BSP Governor Benjamin Diokno said. — Ian Nicolas Cigaral