Credit and debit card fraud has seen a sharp upward spike as fraudsters prowl for holiday shoppers.
Paul Kent, managing director of Bryanston-based SureSwipe credit and debit card swipe machine provider said they are on ultra-high alert.
He said, “The good news is that debit cards are less likely to be scammed than credit cards. You are also less likely to experience fraud at a store than online or at an ATM. There is so much security at tills in stores that it is very hard for a fraudster to get away with it. We saved merchants and consumers more than R52 million this year by picking up fraud attempts quickly. But at this time of the year criminal activity tends to accelerate. Globally, the use of pins has seen a decline in credit and debit card fraud, but criminal syndicates have become better at stealing information from stores through their computer systems and making fake cards.”
Online shopping and ATMs are the places were consumers – anywhere in the world – are most likely to encounter fraud.
Earlier this year the South African Banking Risk Information Centre (Sabric) revealed that the banking industry’s gross fraud losses due to South African-issued credit card fraud grew by 22 per cent – from R300,6 million in 2012 to R366,8 million in 2013.
And global cyber-security firm, Norton’s 2012 Cybercrime Report, placed South Africa third, behind China and Russia, as the world’s leading cyber-crime hotspots.
Counterfeit credit-card fraud losses rose 27 per cent in 2013.
The Better Business Bureau in the United States this month also warned consumers and stores about “sticky ATM’s.” It says, “In this con, thieves glue down certain ATM buttons ‘enter,’ ‘cancel’ and ‘clear’ to prevent you from completing a transaction after inserting a cash card and keying in a PIN. Frustrated, you leave the machine to report the problem and crooks move in to complete the withdrawal.”
Worldwide, according to U.S. government statistics, credit card fraud exceeds $11bn (or R110bn) a year. The European Bank says credit card fraud in Europe amounted to Euro1.3bn (more than R13bn in 2012 – up 11,5% from 2011). It said that in 2012, 60% of fraud resulted from “card-not-present- payments, “i.e. Payments via the Internet, post or telephone” and 39% of fraud was with stolen or lost cards, while 17 per cent of fraud was at ATMs.
SureSwipe said the same situation pertains in SA too.
Syndicates often remove the shopper from the fraud equation. The world’s biggest credit card heist happened recently in the U.S. when hardware chain, Home Depot confirmed that data for 56 million shopper’s credit cards were siphoned from its point-of-sale systems over six months. Kent pointed to the KFC heist that took place in South Africa last year too, “cyber-criminals are incredibly sophisticated, but so are our technical teams and those of banks.”
Stolen bankcard data is sold to third-party resellers.
Once it’s with an underground dealer, card counterfeiters buy the magstripes they need and copy it onto fake cards using their own magstripe encoding machines. They use the cards to buy goods they can resell.
Kent said, “Last year only 9,5 percent of South African purchases were online but estimates are that those figures have since doubled and it is here that credit cards are most vulnerable. And too in any situation where a consumer verbally gives his or her credit card information over the phone.”
Advice for consumers:
• Don’t give credit card details over the phone or email
• Never give away your pin or the 3-digit security code at the back.
• Skimming is common; watch your card the minute it leaves your hands.
• Check the purchase amount on the card machine is the same as what is printed on your slip
• Only shop on secure websites.
• Get sms alerts every time your card is used.
• Shred bank statements, criminals search rubbish bins for clues to defraud you.
• Use any anti-virus software your bank recommends.
• Ensure your card password or PIN is not the same as that for other accounts.
• Check your bank statements, immediately query anything you are unhappy about.
• Shops at stores with the SureSwipe anti-fraud logo, staff at that store have undergone extra anti-fraud training to protect you.
Tips for the retailer:
• Independent fraud investigators will professionally investigate claims.
• Run criminal checks on your staff members. If your company or store is ever listed for fraud, you will not be able to obtain credit/merchant services for up to five years.
• Use security cameras where transactions take place for example at paypoints, tills etc.
• SureSwipe offers fraud training and monitors all transactions processed on your its swipe machine, anything out of the ordinary triggers alarms.
• A free copy of the SureSwipe’s fraud training guide is obtainable from marketing@sureswipe.co.za
