Card fraud hits KZN

2014-11-26 00:00

KWAZULU-NATAL has emerged as one of the country’s top three hotspots for credit card fraud, with fraud losses this year amounting to almost R16 million.

The South African Banking Risk ­Information Centre (SABRIC) has voiced its concern about the increase in card fraud from January to September, saying the banking industry’s gross fraud losses due to credit card fraud increased by 23% from R366 million in 2013 to R453,9 million in 2014.

KZN alone accounts for nine percent of the gross fraud loss, an increase from R13,5 million in 2013 to R15,9 million in 2014, measuring up to an 18% increase in the losses.

SABRIC CEO Kalyani Pillay said the biggest contributor to the increase had been false application fraud, which saw fraud losses shoot up from R6,2 million in 2013 to R78,3 million in 2014.

“SABRIC has found that criminals misuse the online application channels provided by banks, by using false details to open multiple credit card accounts. They then obtain legitimate cards and PINs,” Pillay said.

Credit card fraud is most prevalent in Gauteng, the Western Cape and KwaZulu-Natal, which collectively accounted for 88% of all credit card fraud losses in South Africa.

These provinces also recorded the highest number of skimming devices ­retrieved.

From 2005 to September 2014, a total of 1 377 handheld skimming devices were recovered by either the police or bank investigators, with 74 of these seized between January and September 2014.

Of the 74 retrieved this year, 38 were from Gauteng, 13 from KZN and nine from the Western Cape.

Card-skimming involves 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 the ATMs or points of sale.

“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.

A further increase was seen in lost/stolen card fraud from R7,9 million to R41,2 million.

On the only good note, SABRIC announced that counterfeit credit card fraud losses throughout the country decreased by 12% from R55,1 million in 2013 to R48,4 million in 2014.


Below are some important tips that the public should adhere to ensure they don’t fall victim to card fraud:

• Be cautious of strangers offering help, as they could be trying to ­distract you in order to get your card or PIN

• Keep your transaction slips and check them against your statement to spot any suspicious transactions, which must be queried with your bank immediately

• If your card is retained, do not leave the ATM before you have ­cancelled your card by calling your bank’s call centre using your own mobile phone

• Never let the card out of your sight when making payments, and if possible insert the card into the point of sale device yourself.

• Do not ask anyone to assist you at the ATM, not even the security guard or a bank official. Rather go inside the bank for help

• If you are disturbed or interfered with while transacting at the ATM, cancel the transaction and immediately report the incident using your bank’s stop card tollfree number, which is displayed on the ATM.

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