In­crease in credit card fraud means you must be vig­i­lant

Weekend Argus (Saturday Edition) - - GOODPASTIMES - NEESA MOOD­LEY-ISAACS

You are well ad­vised to hang on to your credit card tightly this fes­tive sea­son, not only be­cause of the im­pli­ca­tions of too much spending for your bud­get but also to guard against fraud.

Kalyani Pil­lay, the chief ex­ec­u­tive of the South African Bank­ing Risk In­for­ma­tion Cen­tre, says the bank­ing in­dus­try’s losses as a re­sult of South African-is­sued credit cards used fraud­u­lently any­where in the world in­creased by five per­cent, to R443 mil­lion, be­tween July last year and June this year.

In June last year, credit card fraud had in­creased by 30 per­cent from the pre­vi­ous year.

“Most bank fraud losses with South African-is­sued credit cards occurred in­side the coun­try, and 89 per­cent of the losses occurred in Gaut­eng, KwaZulu-Natal and the West­ern Cape,” Pil­lay says.

Pil­lay says, how­ever, that over­all losses due to card fraud oc­cur­ring within South Africa de­creased by six per­cent in the re­port­ing pe­riod to June. She at­tributes the de­crease to the im­pact of chip and PIN tech­nol­ogy, as well as a higher aware­ness among con­sumers of card fraud.

Coun­ter­feit card fraud – which in­creased by 22 per­cent this year, to R144 mil­lion – ac­counted for most of the bank­ing in­dus­try’s losses to card fraud.

“You have to be aware of po­ten­tial crime and not let your credit card out of your sight when you make a trans­ac­tion. You also should not ac­cept un­so­licited as­sis­tance when you are mak­ing an ATM trans­ac­tion.

“The skim­ming of credit cards via hand-held skim­ming de­vices re­mains the main modus operandi to ob­tain the in­for­ma­tion re­quired to man­u­fac­ture coun­ter­feit cards,” Pil­lay says.

Card skim­ming refers to the use of a card reader to copy the en­coded in­for­ma­tion on the mag­netic strip of a le­git­i­mate card. The data are then used to cre­ate coun­ter­feit credit cards.

She says losses due to fraud­u­lent credit card trans­ac­tions per­formed over the phone, by mail or­der or on­line in­creased by 45 per­cent in the year to June, while fraud com­mit­ted us­ing credit cards that did not reach the in­tended re­cip­i­ents in­creased by 35 per­cent.

Pil­lay says fraud as a re­sult of crim­i­nals open­ing credit card ac­counts with fraud­u­lent iden­tity doc­u­ments de­creased by 54 per­cent. “The de­crease in this type of fraud shows that the in­ter­nal se­cu­rity sys­tems of banks are prov­ing a de­ter­rent to crim­i­nals.”

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