News24

Credit card fraud nearly doubles

2011-12-07 22:39

Cape Town - Credit card fraud nearly doubled to R403m in the 2009/2010 financial year, a study by the SA Banking Risk Information Centre (Sabric) has found.

In the report, released on Tuesday, Sabric said the amount increased from R263.8m last year as the expanding credit card market gave fraudsters more opportunities for scams.

"Credit card fraud occurred in all the provinces in South Africa although some provinces experienced more card fraud than others," it said.

"Gauteng, KwaZulu-Natal and Western Cape account for 92.3% of the total credit card fraud losses in South Africa - the highest number of skimming devices is also recovered in these provinces."

Sabric chief executive Kalyani Pillay said the fraud came as banks were signing up more new customers and were providing products such as credit cards to existing customers who previously did not have access to them.

"The higher volumes of cards in the market provide more opportunities for credit card fraudsters to carry out scams," she said.

Sabric's report found that banks had also seen an increase in the number of cash withdrawals at ATMs using counterfeit credit cards.

Some 159 handheld skimming devices were retrieved during the year, compared to 190 last year.

Another 38 ATM mounted skimming units were removed this year, compared to 36 in the 2009/10 year.

According to the report, the introduction of a dedicated police team to tackle card-related crime in Gauteng province had a significant positive impact on card fraud in the province.

"Since August 2010 the [SA Police Service] project team jointly with bank investigators and Sars enforcement unit affected 261 arrests and seized 3 614 exhibits," it found.

Comments
  • Themba - 2011-12-07 23:24

    What about online transactions?

      Hemant - 2011-12-08 12:04

      Use VCpay application. Available from www.vcpay.co.za Instead of giving out your plastic credit card, you create a ONE TIME card on your mobile phone. Once this card is used for purchases, it can't be reused, even if someone gets hold of it. The VCPay application is bank independent and associated with Mastercard. You can fund your application @ any Pick 'N Pay, via EFT @ any bank etc. See their website for more information: www.vcpay.co.za

  • charmaine.rowlands - 2011-12-07 23:55

    don't know how the banks can solve this problem, as Sargon says all they need is the card number and the security code and they can shop online to their hearts content. If it takes awhile to realise that your card is being used illegally, you're responsible for the money spent until you've reported it "stolen".

  • Theunis - 2011-12-08 01:38

    The banks in aliance with scamsters and shrewd companies assist in opening your account to allow that you are deprived from your money kept with them.A typical example is the sms received via FNB on behalf of Naedo Collect during Dec 2009,informing that an amount of R1,000-00 was paid into one's account.On approach the bank informed that the sms was send in error and should be ignored.This was halfway through my 24 month contract with cell C.What happened then,was that through this ex'ercise,my account was opened to have money taken out of it by Naedo Collect on behalf of cell C,and after the 24 month contract came to terms.Further to the fact that I was charged with no airtime to my credit,regardless this undue over deductions,and regardless the fact that I approached my bank to stop the cell C deductions at the cost thereto against my expences.It just commenced through Naedo Collect.The cruxs appeareantly manifest itself therin that ones bank cannot prohibet access to ones account in instances like this,because the deduction does not exeed R100-00,and they simply use different codes on deductions.Hence this package by cell C at R100-00pm worth of R110-00 airtime +100 free sms'es,which on the long term would turn out to be pre meditated fraud with one's bank also having a foot in the door.Confronting cell C is met by fancy footwork and rope adope tricks.Naedo collect transform to Real pay in denial.Reporting the matter to ICASA beared a mouse.Report it to the police?Ha ha.

  • dkropman - 2011-12-08 02:09

    Well this is what you could do to help prevent CC fraud. 1st set you credit card so that it cannot be used online 2nd set up your credit card to sms you every time it is used (or email) 3rd for all online transactions, use a one time temporary credit card, that is just for the amount of your transaction. 4th if you do get a charge that is not yours, log onto your bank website. Find the transaction, and click the dispute button. You should get instant money back temporarily and after "investigation" it will be permanent. 5th as long as you report your card stolen within 30 days, all fraudulent charges are reversed. 6th You can set up that at petrol stations and shops will prompt you for you zip code/postal code. Well that is what I do in the US. I presume, as SA banks are supposidly 1st world, you have the same features. That is on my CC that has no yearly fee, I think the CC's that have a annual fee, have more safeguards.

  • duduzile.dunicz - 2011-12-08 04:17

    Banks in SA are SHOCKING!!!They honestly don't care about the customers at all! I have accounts in Europe and Asia. My UK card was hacked and I was notified telephonically within 24 hrs and all money was paid back in! In Korea, all the bank staff know your pin because they are that honest!!! I have lived here for 2 years and nothing has ever gone missing from my account. Do your research and choose a bank that will look after you and not vice-versa!

  • christiaan.brand - 2011-12-08 05:41

    There's this great technology, invented 10 years ago by Visa, called 3-D Secure. It protects credit cards online - unfortunately the implementation of this technology in South Africa, is absolutely horrible, and customers demanded that banks switch it off. When implemented correctly, this can stop fraudsters from using your account online, unless you accept the charge on your phone (http://www.youtube.com/watch?v=MI-9ZCMppls).

      Victor - 2011-12-08 06:26

      Sorry to say but 3D-secure did nothing to stop fraud. It was not well accepted by merchants. For example - Amazon does not use it. Other reasons? Customers don't remember their 3D-secure password. It creates a bad browsing experience when you get redirected to an issuer's site to enter a password. 3D-secure was notoriously hard to implement for merchants. It's not only a failure in SA but accross the world. Your video was not about 3D-secure, it was advertising for your company "ENTERSECT" - which is fine - just be upfront about it. Two-factor authentication (issuer and cardholder) works with things that are not time-sensitive like logging into your internet banking or paying a beneficiary. All major SA banks do this already. It does not work with financial transactions - which are time-sensitive - you cannot "freeze" a transaction until the cardholder authorizes it - the chances of the transaction timing out somewhere along the authorization chain is too great. Especially if the network is congested and the merchant is overseas. Then the use of the iPhone push messaging platform - you do know that Apple states it's "best-effort" and might not get delivered? Also it's store and forward, so if it cannot deliver now, it will do later which does not help you as the transaction has already timed out. So what happens when you cannot receive the push message - does it mean all your transactions get declined? If I misunderstood the way your system works please correct me.

  • kathy.strehler - 2011-12-08 07:38

    And I was one of the victims - R10000 withdrawn at ATMs using my Woolworths Visa card - and Woolworths Financial Services (Managed by ABSA) don't have the sms alert facility for activity on your account so I only discovered the fraud when I received my statement.

  • Andrew - 2011-12-08 08:15

    Kick the Nigerians out and you will solve the problem.

  • Steve - 2011-12-08 08:20

    yesterday I became a victim ! logged onto my internet banking to see 4 transactions from a ATM qerying the balance - called the call centre - they said Oh there is a amount of R 1500 going through now ! stop i say - it goes through... - in total R 3200 was withdrawn from ATM's in 1 day !! all of this on a account with a R2000 a day limit this is ridiculous time to start keeping cash under the mattress

      procold2 - 2011-12-08 09:27

      these are inside jobs, who else can override your limit

  • Eternity - 2011-12-08 11:16

    Along with credit card fraud one needs to beware of identity fraud. Fraudsters will be able to open up credit accounts and more in your name if they have the correct details and fake documents

  • johan.w.barnard - 2011-12-08 11:17

    Please note that this is only CREDIT CARD FRAUD, not including debit or any other type of card fraud nor any other types of banking fraud. I wish to ask the question, Where were all the so called bank expert when we started training the banks on ATM & Card Fraud Prevention since 2009. I’ll tell you, NO SA Bank has ever attended any of our training programmes and now the proof is on the table. We’ve been showing the banks how the methods have been migrating, how to in advance prevent the fraud but also how to prevent current mainstream frauds activities. The banks we’ve trained all over Africa have shown great successes in preventing ATM & Card Fraud, however SA banks have always been more concern about the training costs than the actual losses they are encoring. Maybe it’s time they get of their back ends, put away their pride and start to do something lasting about these crimes. I’m also a customer and I fully understand the complexities and difficulties these crimes offer, however if you don’t fully understand the crimes how can you prevent them. For more some African info on this you can do a search for “African Banking Fraud you tube” and watch the interesting clips.

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