Massive increase in card fraud - TechCentral

Massive increase in card fraud


The banking industry’s gross fraud losses due to South African-issued credit card fraud has soared in 2014. In the first nine months of the year, losses have accelerated to R453,9m, from R366m in the same period a year ago.

In total, card fraud, including credit and debit card fraud, increased by 19%, with losses rising to R577,4m in the nine months to end-September 2014.

The biggest contributor to the 23% increase in credit card fraud has been so-called “false application” fraud, which saw what the South African Banking Risk Information Centre (Sabric) has described as a “very significant increase”, rising from R6,2m in 2013 to R78,3m 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. By doing this, they obtain legitimate cards and Pins. Of all fraud perpetrated on cards acquired through false applications, 88% of the transactions occurred in South Africa.

“Card not present” fraud, including fraudulent online transactions, committed within South Africa was also a big problem area. Losses from this type of fraud increased by 21% to R68,9m.

Losses associated with debit card fraud grew by 5% to R123,5m in 2014. The majority of these losses are related to counterfeit card fraud and most of the transactions again occurred within South Africa’s borders.

Credit card fraud is most prevalent in Gauteng, the Western Cape and KwaZulu-Natal, collectively accounting for 88% of all losses in this category. These provinces also recorded the highest number of skimming devices retrieved. Between 2005 and September 2014, a total of 1 377 handheld skimming devices have been retrieved by the industry and by police. Seventy-four of these were recovered this year.

More than half (55%) of credit card fraud loss occurred in Gauteng. Losses increased by 49% to R94,7m.

One bright spot was a decline in counterfeit card fraud losses inside South Africa. Losses from this type of fraud fell by 12% to R48,4m in the first nine months of 2014.  — (c) 2014 NewsCentral Media


  1. I partly blame banks for not designing ATM’s properly so that we will never know if it has a skimmer attached or not. Restuarants should also provide better card payment processes so waiters can’t skim our cards in the rush and noise. They should standardise the look and feel of the ATM so people can immediately see if it is tampered with.

    Secondly, just about every time I want to apply for a bond, loan, new account or whatever, companies insist I scan and email copies of ID’s, credit cards, levy statements, proof of this and that and it all goes into a big pile on their email servers. It is ripe pickings for a dishonest employee to take your identity info and go wild opening accounts as you. There has to be a better way to prove our identity, meet FICA requirements but without sending through copies of our prized personal information to some mailbox in the sky.

  2. So I lost my bank cards earlier this year, and got my new credit card delivered by courier, as there is no branch any more in this area. So 4 months later a lady from a courier service calls me to ask if I can still send her a copy of my ID and proof of residence.
    I honestly was not sure anymore whether I had shown my proof of identity , yes or no. But still found it suspicious. So before sending them my papers, I contacted the bank through their website. The email reply states clearly that they never use that specific courier service for delivery of cards. Never heard of this courier anymore.

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