Watch out for these credit card scams

The South African Banking Risk Information Centre (Sabric) announced it has seen an overall decrease in card fraud in 2015.

Sabric’s annual card fraud statistics showed that credit card fraud has decreased by 28.6% from R353.3m in 2014 to R252.2m in 2015. Debit card fraud increased by 8.3% over the last year.

The banking industry attributed the overall decrease to the mitigation measures implemented to fight the scourge of card fraud.

These measures include the improvement of internal systems and the roll-out of chip and PIN technology for cards.

While card fraud is a national threat, the most affected provinces were Gauteng, the Western Cape, and Kwa-Zulu Natal.

The industry statistics indicate that lost and stolen card fraud accounted for 46.2% of debit card fraud losses.

With the roll-out of chip and PIN cards, criminals are reverting to card jamming and swapping at ATMs – accompanied by shoulder surfing for PIN numbers.

Card not present fraud increased by 12.6% from the previous year, and now accounts for 75% of the losses relating to SA issued credit cards.

Sabric warned South Africans to watch out for the following types of fraud.

Card skimming

Card skimming involves the copying of information from the magnetic strip of a bank card by means of a card reader – with the intention to use the data for encoding counterfeit, lost, or stolen cards to transact fraudulently.

Card skimming devices

Card skimming with handheld devices

A total of 892 handheld skimming devices were recovered from 2010 to September 2015 by either the SAPS or bank investigators, with 31 of these devices seized between January and September 2015.

Handheld skimming devices are usually small black objects that fit into the palm of your hand and can easily be hidden in a pocket.

The public is encouraged to report individuals who are seen in possession of skimming devices.

Handheld Card Skimmers

Card skimming with ATM-mounted devices

Cards can be skimmed at ATMs, and bank clients are urged not to accept assistance from anybody at ATMs.

ATM-mounted skimming devices were retrieved in five provinces in 2015. Gauteng had the highest number retrieved (14), followed by the North West (4), and Mpumalanga and Western Cape with one each.

ATM clients are encouraged to be on the lookout for foreign objects attached to ATMs and to always conceal their PIN when transacting.

ATM Card Skimming

Card skimming with a point-of-sale (POS) device

Criminals often steal POS devices and convert them into skimming devices. These POS skimming devices are not connected to a bank system and are used to capture information from a bank card.

A total of 93 POS skimming devices were recovered from 2013 to September 2015 by the SAPS and bank investigators. During 2015, 27 devices were found in the Western Cape (14), Gauteng (12), and Mpumalanga (1).

Merchant Point Card Skimming

Lost or stolen card fraud

Lost card fraud is a fraudulent transaction that occurrs on a valid card after a cardholder misplaces it. Stolen card fraud is performed on a valid card that was stolen from its owner.

The highest fraud losses reported on lost or stolen credit card fraud were cash withdrawals and purchases at liquor and electronic stores, as well as service stations.

Lost or stolen credit card fraud decreased by 8% from R7.6m in 2014 to R7m in 2015. The majority (90.3%) of the fraud losses occurred inside South Africa.

Steal wallet

False application card fraud

False application fraud occurs when a fraudulent transaction is carried out on an account where the card was acquired by falsifying a credit application.

During 2015, fraud losses associated with false applications decreased by 93.5% from R86.9m to R5.7m, and accounted for 2.2% of the overall credit card fraud losses.

Credit card application

Account takeover card fraud

Account Takeover fraud takes place when an existing account is taken over by someone posing as the account holder.

The common denominator for account takeover fraud and false application fraud is the fraudsters’ access to the personal information of their victims. They pretend to be the account holder in order to apply for a replacement card which is used fraudulently.

Credit card fraud losses associated with account takeover fraud increased by 99.8%, from R657,539 in 2014 to R1.3m in 2015. Account takeover fraud accounted for 0.5% of overall credit card losses.

Credit card fraud

Not received issued (NRI) card fraud

NRI card fraud relates to the interception of an issued card before it reaches the customer. Imposters then use the intercepted card fraudulently.

NRI card fraud losses increased by 459.2%, from R20,559 in 2014 to R114,966 in 2015. Credit card fraud losses associated with NRI accounted for 0.05% of the overall credit card losses.

Courier unhappy

More on card fraud

Don’t get caught like a phish – 10 easy steps to avoid credit card fraud

SA police arrest man with hi-tech ATM card skimming devices

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Watch out for these credit card scams