Sabric has released its Card Fraud 2016 report, which shows that “card not present” (CNP) fraud has grown substantially in recent years.
CNP fraud is when a fraudulent transaction takes place and neither the card nor cardholder are present during the transaction.
Examples of this include ordering goods telephonically or purchasing an item or service via an online retailer.
“CNP fraud is generally concluded with fraudulently-obtained card data and personal information, and sourced by various means,” said Sabric.
The fraud report is based on information supplied by multiple banks – including Barclays, FNB, Standard Bank, and Capitec – from January to December 2016.
The report stated that gross losses from CNP credit card fraud increased by 18.9%, from R210.4m in 2015 to R250.0m in 2016, and contributed 66.8% of the total credit card gross fraud losses in 2016.
“This is the highest level of CNP fraud reported to Sabric, with the second-highest being R240.7m gross losses reported in 2014.”
65.1% of the gross fraud losses relate to transactions outside of South Africa, with the remaining 34.9% having occurred at South African merchants.
“The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services – including airline tickets, travel agencies, vehicle hire, hotel accommodation, as well as direct marketing.”
The gross fraud loss associated with CNP fraud on debit cards amounted to R57.7m. The majority of these transactions (73.7%) occurred at merchants outside of South Africa.
The graphic below shows the increase in CNP credit card and debit card fraud since 2010.
SA-Issued Credit Card Fraud
The graphics below from Sabric’s report detail how much the various types of credit card fraud contribute to total gross losses, from 2010 to 2016.
Tips to stay safe
Sabric provided the following safety tips for credit card users:
- Ensure your bank cards are registered for 3D Secure.
- Only place orders with card on a reputable and secure website when shopping online.
- Emails which quote card numbers and expiry dates should not be sent, nor should this information be disclosed over the phone.