by Rod Hughes

As all the media based in Costa Rica have reported, hackers have robbed local people doing banking and even bill paying on line. What is the response of banks whose security systems are foiled and accounts are rifled?

“Tough,” says a report in today’s La Nacion, the nation’s largest newspaper. Local banks, even the privately owned ones with foreign headquarters, are under no legal compunction to reimburse their customers. Banks in developed countries will reimburse clients for Internet theft unless it is proven that it was the result of the customer’s carelessness in protecting his identity. But not here.

In fact, notes La Nacion financial reporter Hazel Feigenblatt, in Britain the same legal vacuum exists but the banks voluntarily stand behind the integrity of their bank accounts, having created their own code. Nor can the official financial supervising body, SUGEF, supposedly a watchdog,agency, force banks to reimburse Internet theft victims.

Worse, says the report, many banks including the largest official bank, Banco Nacional, have only one security measure in place, a single password. The United States has, since 2005, deemed this security system “inadequate.” Meanwhile, some 500 electronic theft complaints have been filed for thousands of dollars of losses and hackers are thinking up new ways to rip people off every day. The variety of ploys is staggering, sniffers, pharming, robots, keyloggers and more.

The banks response is typified by Mario Castillo, president of the Costa Rican Banking Association, who shrugged, “You can’t ask (the banks) to be responsible for something where they have no responsibility.” He did, however, say the association would collaborate on drafting legislation to plug the legal hole, safe in the knowledge that it takes years to pass any law in this country

But not all bank customers are quite so vulnerable. HSBC and, recently, Banco de Costa Rica (BCR) have instituted a second measure against hackers, as well as BAC San Jose, although that bank charges extra for it as an optional service. BCR assistant manager Mario Rivera said that since BCR installed 25,000 “dynamic codes” in December, they have not had a single complaint of theft. Banca Proamerica has a system but only for certain customers and Scotiabank manager Luis Lieberman says his bank will have one soon.

But most of the banks in the country refused or neglected to respond to La Nacion’s inquiries. It appears that until lawmakers force them to, as reporter Feigenblatt wrote, “The banks don’t have to answer to anyone.”