Bank fraudsters ready to pounce

2006-12-05 15:53

Ana Monteiro

Johannesburg - As many South Africans start unwinding to enjoy the festive season break and spend more of their hard-earned money, many criminals are simultaneously gearing up for their most lucrative period of the year.

The South African Banking Risk Information Centre (Sabric) together with the South African Police Service and the big four banks (Absa, First National Bank, Nedbank and Standard Bank), is warning South Africans to be extra vigilant over the period, as incidents of ATM crime, card fraud and identity theft increase in line with higher trading volumes.

The organisations have formed a joint venture in order to address the problem, and while the SAPS is making some inroads to cracking crime syndicates, South Africans are able to avoid becoming victims of bank crime by being more streetwise, said Gilbert Swats, CEO of Sabric, at a conference on Tuesday.

"By raising the public's awareness about specific types of bank-related crimes, the modus operandi of criminals, and explaining how people can avoid being victims of bank crime, we can help consumers do a lot to prevent these crimes from taking place," said Swats.

The coalition has divided bank crime into three segments - automatic teller machine (ATM) crime card fraud and identity theft - providing tips on how to avoid each.

ATM crime threats

Card swapping - where a criminal distracts an ATM user, exchanges the user's card for another and even memorises the PIN number by looking over the shoulder (called "shoulder-surfing" in industry-speak) - is by far the most common type of ATM crime in SA, with the number of incidents doubling to just under 1 250 over the two years to 2006.

Card jamming is less frequent, but a problem nonetheless: this is when the criminal fiddles with an ATM's card reader so that the customer can't remove his or her card from the ATM.

"Thieves monitor the ATM keypad or trick customers into giving up the card from the ATM, only to later retrieve the card and draw cash," explained the organisations in a statement.

Break banking habits

Sabric and the banks say that the incidence of ATM crime increases around times in the month when people are paid and subsequently go shopping. High-risk days of the month are the first, second, 15th, 16th, 23rd and 25th days of the month.

Weekends are also a favourite time for criminals to attack as there are more people out shopping to choose from. Attacks typically take place between 06:00 and 07:00, 10:00 and 12:00 and 17:00 and 18:00.

Gauteng is the riskiest province, followed by the Western Cape and KwaZulu-Natal.

"Peole often use the same ATM for up to three years to withdraw their money," said Swats. He advised that people should vary the place and time at which they use an ATM.

ATM bombings

Another recent criminal development is ATM bombing. Of the country's 15 000 ATMs, 28 have been bombed with commercial explosives, although 18 of these attempts were unsuccessful, said Swats.

SAPS' Superintendent Ronnie Naidoo said the police have created a dedicated team to deal with the bombings and that "breakthrough arrests" have been made. With the majority of attacks taking place in the early hours of the morning, people are not hurt, and while the amount of actual cash stolen is not significant, the cost of replacing the ATM is high.

"The ATM is safe to use - it's the criminals who make it unsafe," said Swats. "Don't let your mind also go on holiday; criminals are always at work, right there at your holiday spot. Be streetwise, be vigilant, don't be distracted and bank safely."

Card fraud

Criminals use a number of techniques to steal card information, such as counterfeiting, false card-applications, taking over accounts through identity theft and stealing cards in the delivery process.

Card skimming is a major problem and involves syndicates that encompass foot-runners (often waiters in restaurants, or people working at airports) to people higher up the criminal "value chain" who take the information skimmed from the card (with a device the size of a matchbox) and create a new card.

"The entire process - from skimming the card, e-mailing the information and producing a falsified card with those details - can take 30 minutes," said Swats.

The police have intercepted 71 skimming devices in four provinces and are dealing with 60 criminal cases (with 11 convictions to date).

To prevent fraud, Swats advised customers:

• not to send e-mails that quote their account number and expiry date;
• ensure they get their own card back after every purchase;
• never to write down their PIN or disclose it to anyone;
• report lost and stolen cards immediately;
• destroy credit card receipts before discarding them; and never let the card out of their sight.

- Finance24