Credit card fraud is on the rise in South Africa. We look at the most common tricks criminals use, and what you can do to avoid them.
The South African Banking Risk Information Centre (Sabric) recently released the latest card fraud statistics.According to the report, credit card related Card-Not-Present (CNP) fraud is still the leading contributor to gross fraud losses in SA. CNP fraud accounted for 72.9% of the losses on SA-issued credit cards.Debit card fraud, however, decreased in 2017. CEO of Sabric, Kalyani Pillay, says that this decrease is due to a reduction in lost / stolen cards and counterfeit-card fraud. The main increase in debit card fraud was again attributed to CNP fraud, due to certain banks now permitting online CNP transactions on debit cards.On the credit card front, things aren’t looking good. Lost /stolen credit card fraud increased by 44.5% and accounted for 5.9% of all gross fraud losses in 2017. 76.1% of that occurred on home turf.In 2017, debit card fraud still amounted to R342.2 million in loss. Credit card fraud totalled at R436.7 million, bringing the overall loss up to almost R800 million.Pillay says that criminals are always adjusting their tactics to take advantage of innovations in the banking landscape. For the most part, though, they’re simply stealing, swapping or installing card-entrapment devices at ATMs. They then shoulder-surf victims in order to learn their PINs.In this article, we’ll have a look at which scams to look out for and what kind of protective measures you can take to avoid them.
It’s been a bit of a rollercoaster ride for South Africans over the last seven years, with certain types of fraud increasing or decreasing as the times have changed.According to Sabric, there are six common types of card fraud in SA. We’ve also added how much damage they did, correspondingly, in 2017.
Lost / Stolen (R25.7 million stolen)
Sabric states that most lost or stolen card fraud occurs at petrol stations, liquor stores, clothing stores or toll plazas. Criminals will attempt to distract the target and steal their credit card after learning the PIN by shoulder-surfing.
Not Received Issued (NRI) (less than R1 million stolen)
In this case, the criminal intercepts the card before it reaches the authentic customer. The imposter will then use the stolen card to commit fraudulent transactions.
False Application Card Fraud (R5.5 million stolen)
This type of card fraud increased by 24.4% last year. It occurs when a person engages in a transaction on an account by using a false credit application. In other words, they apply for a credit card using your personal information.
Counterfeit Card (R83.6 million stolen)
Criminals obtain information from the magnetic strip in your card via card skimming at the ATM. They then use that stolen information to create counterfeit cards with the same information as yours, and embark on a spending spree.In some instances they may even use other stolen cards and then re-code them with new information.
Account Takeover (R2.5 million stolen)
As in the case of False Application, the criminal needs access to your personal information in order to pull this off. The criminal may then pretend to be you and apply for a replacement card, stopping all usage on the card you currently own. They’ve seized your bank account, and will use it as their own.
Card Not Present (CNP) Card Fraud (R318.4 million stolen)
This takes place when the criminal doesn’t have your card in possession, but does have all your personal data. This data can be accessed via various means, such as phishing, prior CNP purchases or even discarded receipts. They will then use it to make purchases online or over the phone.For those who don’t know what phishing is, it’s when a con artist poses as a legitimate institution and lures unsuspecting customers into providing them with sensitive information, such as usernames, passwords and credit card details. They may do this via telephone or email, and you should never fall for it.
Protect Yourself From Fraud
It goes without saying that bank clients need to be vigilant about protecting their personal information. Never share your PIN, One-Time PIN or any other authentication information with anybody. Unless you’re actively using your internet banking or purchasing something online, your bank will never ask you for these.Sabric has urged South Africans to take the following protective measures:
Never disclose your passwords and PINs when asked to do so by anyone via telephone, fax or email;
Avoid sending e-mails that quote your card number and expiry date;
Avoid carrying any unnecessary personal information in your wallet or purse. Do not write down your PINs and passwords, and when choosing your PIN or password, avoid obvious choices like your birthday or names;
Do not choose the same PIN for your debit, cheque and credit card. That way, if you lose one, the others will still be safe;
Don’t do any online banking at internet cafés or unsecured terminals such as hotels and conference centres;
When shopping online, only place orders with your card on secure websites;
Subscribe to your bank's SMS notification services to inform you of any transactional activity on your account. Take the time to review your account statements on a timely basis, and be sure to query disputed transactions with your bank immediately;
Protect your cards as if they were cash. Never let the card out of your sight when making payments, and check that you get your card back after every purchase;
While transacting, keep an eye on the ATM card slot to ensure that your card is not taken out, skimmed and replaced without your knowledge;
Should your card be retained by an ATM, contact your bank and block your card before you leave the ATM;