Tips to prevent ‘card-not-present’ fraud

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Card-not-present fraud is the leading contributor to gross card fraud losses.

The South African Banking Risk Information Centre (Sabric) released its annual crime stats for 2019 on behalf of the banking industry which revealed that online banking fraud incidents increased by 20% between 2018 and 2019.

Card-not-present fraud (CNP) is the leading contributor to gross card fraud losses, which occurs when a person’s card number is used fraudulently by someone else to make a purchase while the physical card is in their possession.

Although online banking fraud had increased, gross fraud losses on banking apps increased by only 1% despite a massive drive by banks to increase the number of transactions processed on apps.

Sabric CEO Nischal Mewalall said in a statement: “Our banks have sound security measures in place to mitigate digital fraud. Criminals know this and therefore resort to manipulative social engineering tactics to get bank customers to inadvertently share their personal and confidential information, allowing them access to transact on customer accounts without authority. However, there have been no reports from our banks where a banking app was technically compromised to commit fraud.”

Mewalall said credit card and debit card fraud increased by 20.5%.

“The increase in credit card fraud must be viewed against the growth of the credit card payment ecosystem which has seen a rise in the number of credit card transactions processed by banks, coupled with increases in the number of cardholders and merchants. This would have contributed to more incidents,” he said.

He said 66.6% of all fraud on South Africa issued credit cards took place on merchant devices in a foreign country while the counterfeiting of cards decreased by 44.8% for credit cards and by 34.8% for debit cards.

“South African e-commerce merchants largely comply with 3D secure whereas merchants abroad don’t use 3D secure,” he said.

Meanwhile, associated robberies decreased by 2%, Mewalall further said Limpopo, Mpumalanga and Western Cape showed the biggest decreases for the crimes.

“Also noted that ATM attacks decreased by 9%. The North West, Free State, Western Cape and Gauteng accounted for the greatest decreases in incidents. Whilst, cash-in-transit robberies decreased by 16%. All provinces with the exception of KwaZulu-Natal and the Free State experienced incident decreases.

“Overall gross losses on card transactions in South Africa amounted to R428.6m. This was a 2% decrease when compared to the previous year,” he added.

Here are tips to prevent CNP fraud:

  • Personal information includes identity documents, driver’s licenses, passports, addresses and contact details amongst others. Always protect your personal information by sharing it very selectively and on a need to know basis only.
  • Never share your confidential information which includes usernames, passwords and PIN numbers with anyone.
  • Review your account statements on a timely basis; query disputed transactions with your bank immediately.
  • When shopping online, only place orders with your card on a secure website.
  • Register for 3D Secure.
  • Implement dual authentication for all accounts and products, especially for financial services products.
  • Do not send e-mails that quote your card number and expiry date.
  • Do not use your information if you suspect it may have been compromised. Rather use other personal information that you have not used previously in order to confirm your identity in future.
  • Register for SMS notifications to alert you when products and accounts are accessed.
  • Conduct regular credit checks to verify whether someone has applied for credit using your personal information and if so, advise the credit grantor immediately.
  • Investigate and register for credit-related alerts offered by credit bureaus.

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