kaspaas
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"The banking system is sloppy. I can't believe that a stolen, cancelled card was being accepted at almost a dozen places. Now I know why we pay ridiculously high bank charges. They have to pay up for all these transactions," she said.""
http://www.busrep.co.za/index.php?fArticleId=3296051
Banks liable for stolen card transactions
June 16, 2006
By TASH REDDY, ROY BARFORD and MBULELO BALOYI
Banks and businesses that allow credit card transactions to continue if they know the cards are stolen or fraudulent will face criminal charges.
This was the warning from the Banking Ombudsman after South Africa's four major banking groups called on businesses to be more vigilant when processing credit card transactions as more cases of illegal transactions were being reported.
In many cases, in spite of cardholders having notified their banks that their cards had been stolen, criminals continued to use stolen cards.
Banks still do not have a system that immediately blocks a credit card once it has been reported stolen.
One recent case was that of Waterfall resident Freek Vermaak, whose bank and credit cards were stolen during an armed robbery at the Hillcrest Post Office on April 21.
Vermaak had reported his cards stolen the same day, but a few hours later his petrol card was used at two filling stations. Two days later his credit card was used at a shop.
Now the Banking Ombudsman says banks and merchants, if found guilty of allowing transactions to continue, will be brought to book.
Spokesman Monique Pillay said: "There is no set penalty, but if an individual lodges a complaint with us about transactions still processed on a stolen credit card, we will approach the bank and recommend that they refund the customer - including bank fees and extra charges. The bank will definitely bear the loss."
Standard Bank customer Sharon Gill cancelled her credit card immediately after it was stolen from her at gunpoint, but the perpetrators still went on a wild spending spree which lasted more than two weeks. After spending more than R3 000 on her credit card at several shops, the card was cut up when the one of the thieves couldn't produce an ID.
Gill said: "I cancelled the card within five minutes of it being stolen, but it was still being used weeks later.
"The banking system is sloppy. I can't believe that a stolen, cancelled card was being accepted at almost a dozen places. Now I know why we pay ridiculously high bank charges. They have to pay up for all these transactions," she said.
Pillay said: "If she (Gill) can prove with her slips what is happening, her bank could be in serious trouble. When you cancel a card, nobody should be able to use it," she said.
Standard Bank's external communications manager, Eric Larsen, said banks didn't hold customers liable for purchases proven to be fraudulent. The blame lay mostly with merchants who still processed the transactions.
Click here
"The problem is, in many cases merchants are negligent and don't check the identity or signatures. But customers are not held responsible for the account. The bank pays for such transactions and in some cases the merchant is held accountable."
First Rand Bank's card fraud forum chairman, Jan Kruger, agreed that merchants were often at fault. "Banks need merchants to be vigilant when accepting cards for payments. Merchants guilty of processing fraudulent transactions will be charged and held accountable for those accounts."
Nedbank's media relations officer, Roshelle Pillay, said: "There are cases where cards are still allowed to be used as the banks investigate the matter and try to catch the culprits through the transactions they make."
Doug Hardie, Nedbank's general manager of client service, said: "Should the investigation prove that the fraud occurred for reasons outside the client's control, the client will be refunded. But in cases where confidential information has been given to third parties, the bank will not accept responsibility for the fraudulent loss."
Absa's manager of card fraud, Errol Smith, said it was in the best interest of clients to make sure they had lost card protection or fraud insurance.
"This will ensure that clients are not held responsible for fraudulent purchases," Smith said.
Jennifer Heeger, the media liaison officer at First National Bank, said a customer whose card was lost or stolen should report this immediately to their bank's hotline and then provide written confirmation of the incident within a day.
"Customers will not be held liable for any transactions that take place on their credit card as a result of the loss or theft, provided hey were not negligent in safeguarding their card or personal identification number (PIN)."
The problem is compounded by the growing numbers of syndicates that duplicate South African credit and debit cards and make large withdrawals from them. Despite systems to detect card fraud, the problem is spiralling out of control. Recently, banks admitted that information from the magnetic strip on cards could be copied and that the most active group was believed to be a Bulgarian syndicate.
http://www.busrep.co.za/index.php?fArticleId=3296051
Banks liable for stolen card transactions
June 16, 2006
By TASH REDDY, ROY BARFORD and MBULELO BALOYI
Banks and businesses that allow credit card transactions to continue if they know the cards are stolen or fraudulent will face criminal charges.
This was the warning from the Banking Ombudsman after South Africa's four major banking groups called on businesses to be more vigilant when processing credit card transactions as more cases of illegal transactions were being reported.
In many cases, in spite of cardholders having notified their banks that their cards had been stolen, criminals continued to use stolen cards.
Banks still do not have a system that immediately blocks a credit card once it has been reported stolen.
One recent case was that of Waterfall resident Freek Vermaak, whose bank and credit cards were stolen during an armed robbery at the Hillcrest Post Office on April 21.
Vermaak had reported his cards stolen the same day, but a few hours later his petrol card was used at two filling stations. Two days later his credit card was used at a shop.
Now the Banking Ombudsman says banks and merchants, if found guilty of allowing transactions to continue, will be brought to book.
Spokesman Monique Pillay said: "There is no set penalty, but if an individual lodges a complaint with us about transactions still processed on a stolen credit card, we will approach the bank and recommend that they refund the customer - including bank fees and extra charges. The bank will definitely bear the loss."
Standard Bank customer Sharon Gill cancelled her credit card immediately after it was stolen from her at gunpoint, but the perpetrators still went on a wild spending spree which lasted more than two weeks. After spending more than R3 000 on her credit card at several shops, the card was cut up when the one of the thieves couldn't produce an ID.
Gill said: "I cancelled the card within five minutes of it being stolen, but it was still being used weeks later.
"The banking system is sloppy. I can't believe that a stolen, cancelled card was being accepted at almost a dozen places. Now I know why we pay ridiculously high bank charges. They have to pay up for all these transactions," she said.
Pillay said: "If she (Gill) can prove with her slips what is happening, her bank could be in serious trouble. When you cancel a card, nobody should be able to use it," she said.
Standard Bank's external communications manager, Eric Larsen, said banks didn't hold customers liable for purchases proven to be fraudulent. The blame lay mostly with merchants who still processed the transactions.
Click here
"The problem is, in many cases merchants are negligent and don't check the identity or signatures. But customers are not held responsible for the account. The bank pays for such transactions and in some cases the merchant is held accountable."
First Rand Bank's card fraud forum chairman, Jan Kruger, agreed that merchants were often at fault. "Banks need merchants to be vigilant when accepting cards for payments. Merchants guilty of processing fraudulent transactions will be charged and held accountable for those accounts."
Nedbank's media relations officer, Roshelle Pillay, said: "There are cases where cards are still allowed to be used as the banks investigate the matter and try to catch the culprits through the transactions they make."
Doug Hardie, Nedbank's general manager of client service, said: "Should the investigation prove that the fraud occurred for reasons outside the client's control, the client will be refunded. But in cases where confidential information has been given to third parties, the bank will not accept responsibility for the fraudulent loss."
Absa's manager of card fraud, Errol Smith, said it was in the best interest of clients to make sure they had lost card protection or fraud insurance.
"This will ensure that clients are not held responsible for fraudulent purchases," Smith said.
Jennifer Heeger, the media liaison officer at First National Bank, said a customer whose card was lost or stolen should report this immediately to their bank's hotline and then provide written confirmation of the incident within a day.
"Customers will not be held liable for any transactions that take place on their credit card as a result of the loss or theft, provided hey were not negligent in safeguarding their card or personal identification number (PIN)."
The problem is compounded by the growing numbers of syndicates that duplicate South African credit and debit cards and make large withdrawals from them. Despite systems to detect card fraud, the problem is spiralling out of control. Recently, banks admitted that information from the magnetic strip on cards could be copied and that the most active group was believed to be a Bulgarian syndicate.
