Online credit card fraud warning for South Africans

Losses due to credit card fraud increased by 23 percent from R366 million in 2013 to R453.9m in 2014, the SA Banking Risk Information Centre (Sabric) said on Tuesday.

The biggest contributor to the increase was false applications fraud which saw an increase from R6.2m in 2013 to R78.3m in 2014, Sabric CEO Kalyani Pillay said in a statement.

“Of all fraud perpetrated on cards acquired through false applications, 88 percent of the transactions occurred in South Africa.

“Sabric has found that criminals misuse the online application channels provided by banks by using false details to open multiple credit card accounts. Consequently they then obtain legitimate cards and PINs.”

Counterfeit credit card fraud losses in South Africa decreased by 12 percent from R55.1m in 2013 to R48.4m in 2014.

While, “card not present” fraud committed in South Africa increased by 21 percent from R56.7m in 2013 to R68.9m in 2014.

Pillay said the losses associated with debit card fraud increased by five percent to R123.5m in 2014, from R117.7m in 2013.

“The majority of the debit card losses are related to counterfeit card fraud and most of the transactions occurred within South Africa.

“When debit cards are used outside of the borders of South Africa a high percentage of the cards are used in neighbouring countries such as Lesotho, Namibia, Zimbabwe, Mozambique, and Botswana.”

Gauteng, the Western Cape, and KwaZulu-Natal were responsible for 88 percent of all credit card fraud losses.

The three provinces also had the highest number of skimming devices retrieved.

From 2005 to September 2014 a total of 1377 hand held skimming devices were recovered.

Between January and September this year, 74 skimming devices were seized, 38 in Gauteng, 13 in KwaZulu-Natal and nine in the Western Cape.

Card skimming involved the illegal copying of encoded information from the magnetic strip of a legitimate card by means of a card reader, and this could occur either at ATMs or points of sales.

“We urge bank customers to adhere to ATM safety tips such as not accepting assistance from anybody at the ATM and not letting their cards out of their sight when transacting,” said Pillay.

Gauteng had the most credit card fraud cases with 55 percent of losses in the province. Credit card fraud in Gauteng increased by 49 percent from R63.5m in 2013 to R94.7m in 2014.

In the Western Cape the loss increased by 47 percent from R26.2m in 2013 to R38.6m in 2014. In KwaZulu-Natal the loss increased by 18 percent from R13.5m in 2013 to R15.9m in 2014.

Lost or stolen card fraud increased from R7.9m in 2013 to R41.2m in 2014.

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Online credit card fraud warning for South Africans