Pretoria - The banking industry’s gross losses due to South African issued credit card fraud has increased by as much as 23% from last year.
The South African Banking Risk Information Centre (SABRIC) on Tuesday said bank card fraud came in at R453.9 million in 2014, up from R366 million in 2013.
SABRIC CEO Kalyani Pillay said the biggest contributor to the increase has been false applications fraud, which saw a very significant increase from R6.2 million in 2013 to R78.3 million in 2014.
Of all fraud perpetrated on cards acquired through false applications, 88% 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,” said Pillay.
With regards to counterfeit credit card fraud losses inside South Africa, SABRIC reported a decrease of 12% from R55.1 million in 2013 to R48.4 million in 2014.
However, “card not present” fraud committed within South Africa increased by 21% from R56.7 million in 2013 to R68.9 million in 2014.
The losses associated with debit card fraud also showed an increase of 5% from R117.7 million to R123.5 million in 2014.
The majority of the debit card losses, according to SABRIC, are related to counterfeit card fraud and most of the transactions occurred within South Africa.
Credit card fraud is most prevalent in the provinces of Gauteng, the Western Cape and KwaZulu-Natal as they 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 South African Police Service or bank investigators, with 74 of these seized between January and September 2014.
The majority of handheld skimming devices were recovered in Gauteng (38), KwaZulu-Natal (13) and the Western Cape (9).
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 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.
She also urged consumers to keep their transaction slips and check them against statement to spot any suspicious transactions, which must be queried with the bank immediately. - SAnews.gov.za
