How Credit Card fraud works in South Africa?

Credit card fraud is a serious issue in South Africa. Many have fallen victim to scammers who target unsuspecting individuals to access their credit card information.

The card fraud scammers are swindling South Africans over R800 million every year. Credit card fraud increased by 18.4% in 2019 with a 1.1 point increase from the previous year.

The numbers are very high and scammers are always trying to find new ways to get money from your credit card.

Some syndicates even invest thousands to buy equipment and software to steal money from credit cards.

Also, criminals are always improving skills to operate current technology and finding innovative ideas.

You need to know how credit card fraud works, as it may affect you at any time.

Criminals target mostly gullible individuals and trick them to release their credit card details.

Whether in South Africa or abroad perpetrators use similar methods.

You need to protect yourself from these scammers and know what type of methods they use and the safeguards you can use to protect yourself.

Credit card methods used in South Africa

Many methods are used and improved in time to keep up with the current technology used by banks and card issuers.

Perpetrators make sure that they are always on top of the game as they invest so much in skills, technology and equipment.

Most commonly used card fraud types in South Africa at present include Counterfeit Card Fraud, Lost and Stolen Card Fraud, False Application Fraud and Card Not Present Fraud.

We will address each and give precautions that you can use to avoid any problems.

1. Counterfeit Card Fraud

This involves a credit card that perpetrators manufacture illegally, that uses personal information stolen from a magnetic strip from a genuine card issuer.

Cards used can be from Standard Bank, Absa, FNB

etc. Some people call this card cloning and it is one of the most common credit card fraud methods.

This method requires certain technology that uses skimming devices.

Safeguards against counterfeit card fraud

• Never let your card out of your sight when making purchases. Perpetrators use card skimming devices that can be easily used and are portable. You won’t see it happening if you are not paying attention.
  
• Never disclose your PIN number to anyone, not even a security guard or a bank employee. To use a cloned card, fraudsters will need your PIN to action payment. If there is no pin then payments cannot be made, this is not the case with online shopping.
  
• Be aware of the people around you. If you do not trust the people around you then it’s better to trust your instincts. While checking the people around you, it is also important to check the ATM you are using. If you have any suspicions with the ATM then use a different ATM.
  
• Keep your banking information safe when making deposits. Don’t throw away your banking information when making ATM deposits. This will prevent dust bin raiders from acquiring your banking information.

Technology used in counterfeit card fraud

When it comes to counterfeit card fraud, technology plays a vital role in getting things done.

There is much technological equipment that perpetrators use to get your card information.

These technological equipment are discussed below so that you can familiarise yourself with them.

False keyboard overlay

This is used for card skimming. Data on a credit or debit card’s magnetic strip is illegally copied by a device attached to the slot and the PIN number is recorded by a false keyboard or via a pinhole camera.

Lebanese Loops

This is a plastic device with a barb in the reader which catches the card in the machine and makes you believe it has been swallowed.

Fake machines

These machines are hard to identify from the actual ATM machine. This is a clown ATM cover that allows fraudsters to access your card information, pin and money.

They install the cover on top of the actual ATM machine and it uses card reading technology.

Pinhole cameras

Pinhole cameras are spy cameras that criminals strategically place on ATM machines to capture pin numbers.

These are very small in size and can be as the size of a cellphone camera lense so they are not easily visible.

They usually place them on top of an ATM screen for a clear view of an ATM keyboard.

ATM card readers

This is a small device that perpetrators insert on a card slot at ATMs to read card information.

They use the method for card cloning, therefore, there will be now two cards with the same information.

These can be spotted by checking the card slot and see if it is not bulky or misaligned. The ATM card reading machine causes the misalignment.

2. Lost and stolen card fraud

This refers to fraudulent transactions made from authentically issued credit/debit card which was lost or stolen.

Stolen or lost card fraud is done through online purchases, in-store purchases, cashback at tills and ATM withdrawals.

Safeguards against lost and stolen card fraud

• Immediately report the stolen or lost card with your bank. If you have internet or mobile app banking then stop/freeze your card as soon as it comes to your knowledge that your card was stolen or lost.
  
• Make an Affidavit stating that your card was stolen. You can do this simultaneously with reporting to your bank that your card was stolen. Since credit cards come with insurance nowadays, money used by perpetrators from your credit card can easily be repaid.

3. False application fraud

This involves creating fraudulent accounts using someone else’s personal information without their knowledge.

A person may assume someone else’s identity and apply for a credit card as if they were that person.

With the right information in hand, perpetrators can execute this easily. They carryout applications of credit cards online and sometimes at banks.

Safeguards against false application fraud

• You must refrain yourself from issuing out your personal information to unauthorized individuals /companies. Avoid responding to spam emails asking for your personal details, report these immediately.
  
• Keep your personal information safe at all times. Your bank statements, ID number, payslip and proof of address must be protected at all times. To be safe, only give out these when necessary to lenders registered with the NCR.

4. Card not present fraud

This refers to fraudulent transactions whereby a card or a cardholder is not present at a transaction point.

CNP fraud is done when payment of goods is done telephonically, by fax, email or through the internet.

What is needed to execute such transactions are the cardholder’s name, card number, sometimes CVV plus one-time pin may be required.

Safeguards against card not present fraud

• Always have your card with you and never take your eyes off your credit/debit card. A slight divergence between your eyes and card can lead to your card information being recorded.
  
• Report suspicious behaviour by a person handling your card with your bank.
  
• You should not accept any help from anyone when using an ATM.
  
• Always avoid ATMs that are visibly tampered with or which are surrounded by suspicious people.
  

Conclusion

Though having a credit card makes life so much simple you have to be careful with it.

With these crooks in full operation out there, only vigilance can help you stay safe from falling victim.

Be very attentive and alert when using your credit cards and always be sure to block it if you ever lose it.