NASSAU, BAHAMAS — Senior banking executives are seeking to ease public concern following a surge of social media posts alleging that customer bank accounts were hacked during the Christmas holidays, saying the claims largely stem from misunderstandings surrounding card authorisation processes during peak shopping periods.
Gowon Bowe, chairman of the Clearing Banks Association, said he became aware of the circulating posts and described the claims as largely overstated.
“I’ve been made aware of the social media circulation. What I can say to you is, it’s a sensationalism,” Bowe said. “So, speaking from the Clearing Banks Association chairmanship seat, this is not an issue that is impacting all banks, if there is indeed an issue. It is one that is contained to one particular institution.”
Bowe said the social media commentary overlooks the extensive safeguards built into the banking system, particularly the audit trails attached to electronic fund movements.
“The nature of what persons are referencing in the social media posts really do not take into consideration a couple of things,” he said. “With digital records, etc., even the ability to go to backup tapes and to restore old records, etc., the movement of funds has a far greater audit trail.”
He explained that transfers between institutions must pass through regulated third-party systems.
“Starting with funds leaving a financial institution and going from one institution and going to another, that would either have to go through the real-time gross settlement system with the central bank or the automated clearing house… there may be shifting of funds between customers within a financial institution that can take place, but the transfer of funds requires it to go through third-party systems.”
“It’s not saying that fraudulent payments cannot be made, but there is an automatic audit trail that is available. So, if fraudster A has tried to transfer funds from bank A to fraudster B at bank B, there would be an electronic record.”
Bowe said the timing of the claims coincides with a sharp increase in electronic payments over the Christmas shopping season, particularly on large online marketplaces.
“Another element that has not been considered during the holiday season [is that] the use of electronic payments has increased… and there have been some anomalies that have taken place over the course of the Christmas spending season that could leave persons with the impression of funds being misappropriated.”
He pointed specifically to platforms such as Amazon and PayPal.
“When you make a purchase… for $500, but it’s made up of five items of $100 each, there’s an authorisation for the $500,” he said. “But when the items ship, they ship individually… the merchant then sends a payment request for five $100 payments, but it doesn’t necessarily match it with the authorisation.”
“So, what ends up happening? The five $100 payments get paid out of your account, but the hold that was the authorisation for the original $500 is also there as well.”
That can give customers the impression they were charged twice.
“So, it appears that you’ve been billed $1,000, but in reality, you’ve been billed $500 that has been paid, but you have a hold for that very same purchase that drops over a period of time, usually between seven and ten business days.”
“In ten days, all of the holds will drop because the payments have been made, but the holds weren’t released.”
Bowe said the issue becomes more pronounced when customers make multiple online purchases over a short period.
“If you’re doing a lot of shopping and using your debit card, and that occurs to you multiple times, you will certainly be left with the feeling that someone has just moved money off of my account.”
He stressed that the situation reflects seasonal transaction volumes rather than criminal activity. Bowe acknowledged that merchants often structure transactions for their own efficiency, not consumer clarity.
“The reality is that the merchants… are doing things most efficient for themselves, and these things don’t always have the most effective outcome in terms of cardholders.”
He added that consumer education remains a weak point.
“It’s unfortunately a situation where consumer education is lacking, and that’s a part that the banks can take responsibility for.”
Questions were also raised publicly about slow bank-to-bank transfers during the holidays. Bowe said payment infrastructure itself remained fully functional.
“There has been no backlog or no backup in BACH, which is automated clearing house, and real-time gross settlement, which is the central bank.”
However, he confirmed that posting delays occurred at some institutions due to manual processing.
“With the high volume of those payments, any institution that is doing manual processing… would have seen a high volume and not been crediting people’s accounts in a timely manner.”
“In fact, I have had discussions with the Central Bank that has expressed concern with that.”
Bowe said the issue was not the movement of funds, but the posting of those funds.
“So the actual transfer money is not the issue. The issue was the actual posting by the receiving institution in most cases.”
He added that many delayed payments were unnecessarily routed through real-time gross settlement instead of the automated clearing house.
“The automated clearing house can take a payment up to $1 million, so there’s no reason, in theory, to actually even have a payment under a real-time gross settlement unless it is a very large payment.”
“I’m going to say 95 percent of the time it was on the receiving institution because the monies would have moved instantaneously throughout the day.”
Social media posts initially claimed that Bank of The Bahamas (BOB) customers were largely affected. However, in a brief response to Eyewitness News, BOB Managing Director Neil Strachan said the claims were being misdirected noting that the issue was “specifically related to their Amazon accounts being hacked… not BOB.”
