Card Fraud SOUTH AFRICA 2013
Table of contents summary 3 Qualification of information...4 National Overview of Credit Card Fraud (2006 2013) 5 National overview of credit card fraud (2006 to 2013)...6 Where does the fraudulent expenditure occur?...7 How does South Africa compare internationally?...8 Credit card fraud losses in South Africa...9 Geographical distribution...10 Breakdown per Fraud Type 11 Card Not Present credit card fraud (CNP)...12 What is Card Not Present fraud?...13 Counterfeit credit card fraud...14 What is Counterfeit card fraud?...14 Lost and/or Stolen credit card fraud...15 What is Lost and/or Stolen card fraud?...15 False Application credit card fraud...16 What is False Application card fraud?...16 Account Takeover credit card fraud...17 What is Account Takeover card fraud?...17 Not Received Issued credit card fraud (NRI)...18 What is Not Received Issued card fraud?...18 1 CARD FRAUD 2013
Table of contents Debit Card Fraud 19 Debit card fraud losses in South Africa...20 Geographical distribution...21 Card Skimming 22 What is card skimming?...23 Card skimming with handheld devices...23 What does a handheld skimming device look like?...24 Card skimming with ATM mounted devices...25 What does an ATM mounted skimming device look like?...25 Important Tips to Avoid Becoming a Victim of Card Fraud 26 Industry Measures to Prevent Card Fraud 27 future threats 28 2 CARD FRAUD 2013
Summary The banking industry s gross fraud losses due to South African (SA) issued credit card fraud increased by 22%, from R300.6m in 2012 to R366.8m in 2013. Counterfeit credit card fraud losses increased by 27% in 2013 and contributed to 39% of the overall credit card gross fraud loss. 61% of all Counterfeit credit card losses occurred outside of South Africa. Although Lost and/or Stolen credit card fraud losses increased by 102.4% from R15.6m in 2012 to R31.7m in 2013, the fraud losses account for only 8.6% of the total gross fraud losses on credit cards. CNP card fraud losses increased by 16% from R154.7m in 2012 to R178.7m in 2013 and contributed 48.7% of the total credit card gross fraud losses in 2013. Gauteng, the Western Cape and KwaZulu Natal account for 86.1% of the credit card fraud losses in South Africa. Debit card gross fraud losses amounted to R117.7m in 2013 compared to the R204.0m in 2012 (42% decrease). The majority of the fraudulent debit card transactions for 2013 occurred in Gauteng (42.8%) followed by KwaZulu Natal (16.7%) and Eastern Cape (8.5%). 3 CARD FRAUD 2013
Qualification of Information This report utilises credit and debit card fraud information as provided by Barclays Africa Group, FNB, Standard Bank of SA, Nedbank, Investec, Virgin, Amex, Diners Club, Capitec Bank, Mercantile Bank, Bidvest, Ubank, Bank of Athens, Albaraka Bank, Postbank and African Bank. Cheque card fraud is included in the credit card fraud figures. Reporting covers the period 01 January 2013 to 30 September 2013. For the comparative analysis the above mentioned period will be compared to similar periods since 2006, with a focus on 2012 to 2013. Information set used: All credit and debit card fraud losses as reported to SABRIC by 25 October 2013. All calculations are based on the date of the fraudulent transaction. All fraud losses mentioned in this booklet refer to gross fraud losses and do not necessarily relate to losses suffered by the banking industry. Figures pertaining to losses due to fraud have been rounded off to the nearest R1 million, unless otherwise stated. Due to rounding off, the sum of the separate items may differ from the totals shown. 4 CARD FRAUD 2013
National overview of credit card fraud (2006 to 2013) 5 CARD FRAUD 2013
National overview of credit card fraud (2006 to 2013) Card fraud losses on SA issued cards (all countries) (Jan to Sept 2006 to 2013) MILLIONS 2013 2012 2011 2010 2009 2008 2007 2006 R186,9 R178,3 300,7 R300,6 R291,7 278,5 R278,4 366,9 R366,8 367,5 R367,4 368,0 R367,9 The banking industry s financial fraud losses due to fraud perpetrated with SA issued credit cards increased by 22%, from R300.6m in 2012 to R366.8m in 2013. Card Not Present (CNP) fraud losses increased by 16% during the same period, from R154.7m in 2012 to R178.7m in 2013. Counterfeit card fraud losses increased from R113.9 in 2012 to R144.5m in 2013 (27%). National overview The fraud figures in the graph below depict the industry s total fraud losses on SA issued credit cards, irrespective of the geographical location of the fraudulent transaction. SA issued credit card fraud per fraud type, all countries Fraud Type 2006 2007 2008 2009 2010 2011 2012 2013 Lost and/or Stolen R66.2m R117.5m R117.5m R65.7m R25.8m R18.3m R15.6m R31.7m NRI (Not Received Issued) R4.2m R5.1m R10.4m R8.8m R1.7m R1.3m <R1m <R1m False Application Fraud R29.8m R18.2m R11.1m R5.4m R1.8m R4m R13.3m R6.2m Counterfeit R53.5m R94.7m R157.1m R145.7m R92.7m R207.7m R113.9m R144.5m Account Takeover <R1m <R1m R1.6m <R1m <R1m <R1m R1m R2.2m CNP (Card Not Present) R22.3m R40.7m R65.8m R63.1m R64.2m R133.4m R154.7m R178.7m All figures in R millions 6 CARD FRAUD 2013
48,2 65,1 72,9 78,3 95,5 R 114,05 123,6 R 130,16 135,8 R 145,95 R 164,83 R 213,45 R 213,40 220,8 R 243,93 R 272,44 Where Does the Fraudulent Expenditure Occur? Card fraud losses on SA issued cards (Jan to Sept 2006 to 2013) 2013 2012 2011 2010 2009 2008 2007 2006 MILLIONS R48,1 R72,8 R65,0 R78,2 R95,5 R123,5 R114,0 R135,8 R130,1 R145,9 R164,8 R220,7 R213,4 R213,4 R243,9 R272,4 Transactions not in South Africa Transactions in South Africa During 2013, 60.1% of the credit card fraud losses occurred outside the borders of South Africa compared to 45% in 2012. Credit card fraud losses on SA issued credit cards used inside South Africa decreased by 11.4% in 2013. Counterfeit card fraud losses outside South Africa increased by 102.6% and CNP card fraud losses increased by 39.2%. CNP fraud is still the biggest contributor of fraudulent expenditure on SA issued credit cards in other countries (55% for 2013). Increased fraudulent spend with Lost and/or Stolen cards (146.4%) and cards issued but not received (NRI) (196.5%), were also reported. Criminals are progressively utilising Counterfeit SA issued credit cards in neighbouring countries such as Namibia, Botswana and Mozambique and these transactions are mostly related to fraudulent cash withdrawals at ATMs. During 2013 the use of Counterfeit cards in non-african countries was noticeable, especially in non-emv compliant countries such as the USA and Brazil. Five countries with the highest recorded financial losses due to CNP and Counterfeit fraud on SA issued credit cards during 2013. CNP Counterfeit United States United States United Kingdom Italy France Brazil Germany Spain Ireland United Kingdom National overview 7 CARD FRAUD 2013
How Does South Africa Compare Internationally? Card fraud losses, in pounds, on UK issued cards (Jan to June 2007 to 2013) MILLIONS 2013 216,1 2012 185,0 2011 169,8 2010 186,8 2009 232,8 2008 2007 263,6 304,2 According to Financial Fraud Action UK, fraud losses on UK cards increased by 17% from January to June 2013, compared to the same period in 2012. CNP fraud is the highest loss category responsible for 65.7% of the total losses. Lost and/or Stolen card fraud (13.05%) is the second highest loss category and increased by 1%. Counterfeit fraud is third with 10.7% and increased by 15% compared to the same period in 2012. National overview South Africa mirrors the UK trend with increases in CNP, Counterfeit and Lost and/or Stolen card fraud. The prevalence of card skimming incidents in South Africa is still high and, therefore, a significant portion of the fraud losses can be linked to Counterfeit card fraud. However, as seen in the UK, criminals are reverting back to more basic frauds such as stealing cards and PINs through shoulder surfing and card swopping at ATMs resulting in an increase in Lost and/or Stolen card fraud in South Africa. Source: Financial Fraud Action UK, Press release 4 October 2013 (http://www.financialfraudaction.org.uk/news-article.asp?genre=media&article=2780) 8 CARD FRAUD 2013
Credit Card Fraud Loss in South Africa Credit card fraud losses on SA issued cards used in South Africa decreased by 11.45% from R164.8m in 2012 to R145.9 in 2013. Counterfeit credit card fraud losses decreased by 21% (from R69.8m in 2012 to R55.1m in 2013). CNP fraud committed within South Africa decreased by 15% from R67.1m in 2012 to R56.7m in 2013. Lost and/or Stolen credit card fraud losses increased by 94.6% in 2013 and accounts for 17.7% of the total credit card fraud losses. Changes in business processes linked to Chip & PIN cards, necessitated criminals to revert back to older modus operandi such as shoulder surfing and card jamming or swopping. This has led to the visible increase in Lost and/or Stolen card fraud, similar to the card fraud trends noted in the UK. Lost and/or Stolen card fraud reverted to levels last seen in 2010. Card fraud split by fraud type (Jan to Sept 2006 to 2013) MILLIONS R160 R140 R120 R100 R80 R60 R40 R20 R0 2006 2007 2008 2009 2010 2011 2012 2013 Not received issued Account takeover False applications Lost/stolen Counterfeit Card not present Millions National overview 9 CARD FRAUD 2013
Geographical Distribution Gauteng, Western Cape and KwaZulu Natal account for 86.1% of all credit card fraud losses in South Africa as well as the highest number of skimming devices retrieved. The remaining provinces account for 13.8% of the fraud losses. Although more than 50% of reported losses relate to reported incidents in Gauteng, a decrease of 14% was seen in the total fraud losses for this province when compared to 2012. An increase in fraud losses for Limpopo, Mpumalanga and North West is visible in 2013. Gauteng accounts for 52.9% of the credit card fraud losses, followed by the Western Cape with 21.8% and KwaZulu Natal with 11.3%. The provinces with the highest increase in credit card fraud losses are North West with 55.5% and the Northern Cape with 54.2%. The province with the biggest decrease for 2013 is the Western Cape with 32.9%. Provincial Geographical Distribution National overview 2006 2007 2008 2009 2010 2011 2012 2013 Eastern Cape R1.9m R4.8m R4.9m R2.1m R1.3m R1.9m R3.6m R4.4m Free State R1.6m R3.3m R4.3m R2.3m R1.1m R1.1m R1.3m R1.7m Gauteng R67.8m R91.9m R117.5m R85.9m R49.4m R73.6m R73.9m R63.5m KwaZulu Natal R16.3m R34.3m R41.4m R27.9m R16.7m R23.7m R10.9m R13.5m Limpopo R1.5m R2.7m R3.5m R2.1m R2.2m R2.4m R2.7m R3.3m Mpumalanga R2.7m R6.1m R7.2m R4.9m R1.9m R1.4m R2.3m R3.4m North West R1.4m R4.3m R5.2m R2.6m R1.4m R1.8m R2.1m R3.3m Northern Cape <R1m <R1m <R1m <R1m <R1m <R1m <R1m <R1m Western Cape R11.3m R26.4m R29m R27m R12.8m R29.3m R39.1m R26.2m 10 CARD FRAUD 2013
Breakdown per fraud type (South African issued credit cards, used within and outside South Africa) 11 CARD FRAUD 2013
Card Not Present Credit Card Fraud (CNP) CNP fraud losses increased by 16% from R154.7m in 2012 to R178.7m in 2013 and contributed 48.7% of the total credit card gross fraud losses in 2013. Currently the vast majority of SA issued credit cards are Chip & PIN enabled. The increase in CNP fraud seen over the last few years is a clear indication that South African credit card fraud trends are following similar trends as in other EMV compliant countries such as the UK. Card not present card fraud (Jan to Sept 2006 to 2013) Breakdown per fraud type MILLIONS 2013 178,8 R178,7 2012 154,8 R154,7 2011 R133,4 2010 2009 2008 R64,2 R63,1 65,9 R65,8 2007 40,8 R40,7 2006 22,4 R22,3 12 CARD FRAUD 2013
What is Card Not Present (CNP) Card Fraud? CNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting the transactions. CNP transactions can be conducted under the following circumstances: orders for goods placed telephonically; purchases conducted via the internet, by mail order or fax. Retailers are unable to physically check the card or the identity of the cardholder during such a transaction. The card user becomes anonymous and is able to disguise his/her true identity. Fraudulent CNP transactions are generally concluded with fraudulently obtained card data and personal information. Card details are compromised without the cardholder s knowledge and sourced by various means such as discarded receipts, previous CNP purchases and phishing. Whilst the three or four digit Card Security Code on the back of cards (Referred to as the CVV2 or CVC2) can certainly assist with the prevention of fraud in cases where only card track data was illegally obtained, it does not prevent fraud where the card itself was stolen or intercepted, or where the card holder willingly supplied the information to a criminal during a specific transaction. The banking industry continues to enhance its detection and prevention capabilities. Neural networking systems that monitor client transactions in real time are utilised to flag suspicious or irregular spending. Merchants offering internet transactions are advised to use software such as 3D Secure and other transaction authentication software to protect themselves and their customers. If you or your bank has not already done so, you can register for 3D Secure to help protect you against unauthorised use of your card when shopping online at 3D Secure merchants. What is 3D Secure? It is also called Verified by Visa or MasterCard SecureCode. It is an authentication service that allows only the cardholder to use the card. It helps online merchants and banks to know when it is the cardholder shopping online. It allows the cardholder to enter an additional password or PIN to verify the legitimacy of the purchase. With additional focus on the safety of e-commerce transactions, the bank may require the cardholder to register before the next online purchase. 3D Secure is easy and free to register, simple to use and will give you peace of mind to shop online. When shopping online, only place orders with the card on a secure website and do not send e-mails that quote the card number and expiry date. Clients are urged to only use online merchants that conform to this standard. It is also important for clients to review their monthly bank statements in order to identify unauthorised transactions and notify their banking institutions immediately. Breakdown per fraud type 13 CARD FRAUD 2013
Counterfeit Credit Card Fraud Counterfeit card fraud (Jan to Sept 2006 to 2013) MILLIONS 2013 R144,5 2012 R113,9 2011 2010 R92,7 2009 R145,7 2008 R157,1 2007 R94,7 2006 53,6 R53,5 207,8 R207,7 Breakdown per fraud type Counterfeit card fraud increased by 27% in 2013 and contributes 39.4% of the overall credit card gross fraud losses. 61% of all Counterfeit credit card losses occurred outside South Africa and increased by 102.6% (from R44.0m in 2012 to R89.3m in 2013). Counterfeit credit card losses in South Africa decreased from R69.8m to R55.1m (21%) during 2013. The South African Police Service (SAPS) in collaboration with the South African banking industry embarked on joint projects to arrest and prosecute perpetrators of Counterfeit card fraud and in possession of skimming devices. Skimming (be it with handheld or ATM mounted devices) of cards is currently the preferred modus operandi used by criminals to obtain card holder information. Clients are urged not to let their cards leave their sight when making transactions. It is also important that banking clients familiarise themselves with their bank s ATMs in order to identify any foreign or suspicious objects that are attached to the ATM. What is Counterfeit Card Fraud? Counterfeit card fraud is fraud perpetrated with a card that has been illegally manufactured using information stolen from the magnetic strip of a genuinely issued card. In some instances Lost and/or Stolen cards and/ or old cards are re-encoded with information stolen from a genuine card for purposes of committing counterfeit card fraud. The information needed for a Counterfeit card is usually stolen through card skimming. 14 CARD FRAUD 2013
Lost and/or Stolen Credit Card Fraud Lost and/or stolen card fraud (Jan to Sept 2006 to 2013) MILLIONS 2013 R31,7 2012 15,7 R15,6 2011 18,4 R18,3 2010 25,9 R25,8 2009 2008 2007 2006 65,8 R65,7 66,3 R66,2 117,6 R117,5 117,6 R117,5 Although Lost and/or Stolen credit card fraud increased by 102.4% from R15.6m in 2012 to R31.7m in 2013, the fraud losses account for 8.6% of the total gross fraud losses on credit cards. The majority (81.6%) of the fraud losses occurred inside South Africa. Changes in business processes to accommodate Chip & PIN cards, has resulted in criminals reverting back to previously used modus operandi such as shoulder surfing and card swopping. This has resulted in an increase in Lost and/or Stolen card fraud, similar to the card fraud trends seen in the UK. Lost and/or Stolen card fraud returned to levels last seen in 2010. It is crucial for bank clients not to be distracted when transacting at ATMs and under no circumstances must assistance be accepted from anybody whilst using an ATM. What is Lost and/or Stolen Card Fraud? Lost card fraud is a fraudulent transaction that occurred on a valid issued card after a cardholder lost his/her card and is no longer in possession of the card. Stolen card fraud is a fraudulent transaction that is performed on a valid issued card that was stolen from a legitimate owner. Breakdown per fraud type 15 CARD FRAUD 2013
False Applications Credit Card Fraud False application card fraud (Jan to Sept 2006 to 2013) MILLIONS 2013 2012 2011 2010 2009 2008 2007 2006 R1,8 6,3 R6,2 R4,0 4,1 R5,4 5,5 R11,1 13,4 R13,3 R18,2 R29,8 Breakdown per fraud type Credit card fraud losses associated with False Applications accounted for 1.7% of the overall credit card fraud losses. During 2013, the fraud losses decreased with 52.8%, from R13.3m to R6.2m. After the increase of 226% seen in the 2011/2012 period, numerous strategies for fraud detection and prevention were implemented and the impact is now visible. What is False Application Card Fraud? False Application card fraud occurs when a fraudulent transaction is carried out on an account where the card was acquired by falsifying a credit application. 16 CARD FRAUD 2013
Account Takeover Credit Card Fraud Account takeover card fraud (Jan to Sept 2006 to 2013) THOUSANDS 2013 2012 2011 2010 2009 2008 2007 2006 R255 0,3 R447 0,4 0,3 R310 R611 0,6 R781 0,8 R1077 1,1 1,6 R1618 R2241 2,2 Losses related to Account Takeover card fraud increased by 100.5% (from R1.1m in 2012 to R2.2m in 2013). Credit card fraud losses associated with Account Takeover fraud accounted for 0.5% of the overall credit card losses. Although the percentage increase is high, the associated loss is still relatively low. Continuous consumer education and awareness amongst bank clients of the need to protect personal information (e.g. ID books, bank account details, payslips, and rates and taxes) may have contributed to the decrease mentioned. The banking industry is also constantly improving their internal systems to ensure early detection of this type of fraud. What is Account Takeover Card Fraud? Account Takeover card fraud takes place when an existing account is taken over by someone posing as the genuine account holder. The impostor then uses the account for their own benefit whilst pretending to be the genuine account holder. The common denominator for both Account Takeover fraud and False Application fraud is the fraudsters access to the personal information of their victims. In many instances the criminal will obtain personal or client specific information and pretend to be the client in order to apply for a replacement card which is then, once received, used fraudulently. Breakdown per fraud type 17 CARD FRAUD 2013
Not Received Issued Credit Card Fraud (NRI) Not received issued card fraud (Jan to Sept 2006 to 2013) MILLIONS 2013 2012 2011 2010 2009 2008 2007 2006 R0,7 R0,5 1,4 R1,3 1,8 R1,7 4,3 R4,2 R5,1 R8,8 10,5 R10,4 Breakdown per fraud type Not Received Issued card fraud losses increased by 44.6%, from R500 000 in 2012 to R730 000 in 2013. Credit card fraud losses associated with Not Received Issued cards accounted for 0.2% of the overall credit card losses. Improved bank processes in respect of card collections and PIN activation contributed to this decrease. Customers are urged to respond quickly to calls to collect replacement cards. It is also very important that bank customers alert the bank if replacement cards were not received within a reasonable time. What is Not Received Issued Card Fraud? Not Received Issued card fraud relates to the interception of a genuinely issued card before it reached the customer. Impostors then use the intercepted cards fraudulently. 18 CARD FRAUD 2013
Debit card fraud Debit card fraud losses in South Africa 19 CARD FRAUD 2013
debit Card Fraud Losses in South Africa Debit card fraud gross losses amounted to R117.7m in 2013 compared to R204.0m in 2012 (42% decrease), 93.2% of all transactions were due to counterfeit debit card fraud. A large percentage (81.5%) of the debit card fraud transactions are cash withdrawals at ATMs. Criminals need both the magnetic strip information and the PIN number of a debit card to transact successfully. The majority of Counterfeit debit card fraud can thus be directly linked to card skimming. Debit card fraud losses on SA issued cards (all countries) (Jan to Sept 2011 to 2013) MILLIONS 2013 117,8 R117,7 2012 R204,0 2011 R219,9 The fraud losses on Counterfeit debit cards decreased (40%) from R183.9m in 2012 to R109.8m in 2013. In the same time period Lost and/or Stolen debit card fraud increased 18% which is a similar to the trend seen in credit card fraud (from R6.7m to R7.9m). This is a noteworthy increase considering the overall decrease in debit card fraud. Debit card fraud Counterfeit debit card fraud (Jan to Sept 2011 to 2013) MILLIONS 2013 R109,8 2012 2011 Lost and/or Stolen debit card fraud (Jan to Sept 2011 to 2013) MILLIONS 2013 2012 R6,7 184,0 R183,9 R213,3 R7,9 2011 7,1 R7,0 20 CARD FRAUD 2013
geographical distribution The distribution of debit card fraud within Gauteng, KwaZulu Natal and Eastern Cape followed a similar pattern to that of credit card fraud. In 2013 the majority of the fraudulent transactions occurred in Gauteng (42.8%) followed by KwaZulu Natal (16.7%) and Eastern Cape (8.5%). The other provinces collectively account for 31.8% of the fraud losses on debit cards. The biggest growth was seen in Limpopo where the percentage losses increased from 3.9% to 6.3%. Percentage of debit card fraud losses per province (Jan to Sept 2011 to 2013) Province 2011 2012 2013 Gauteng 42% 43.7% 42.8% KwaZulu Natal 18.8% 18.6% 16.7% Eastern Cape 17.9% 9.4% 8.5% Western Cape 7.5% 9.3% 8.4% Mpumalanga 4.6% 6.2% 6.5% Free State 3.1% 3.3% 4.2% North West 3% 5.2% 5.7% Limpopo 2.6% 3.9% 6.3% Debit card fraud 21 CARD FRAUD 2013
Card skimming 22 CARD FRAUD 2013
what is card skimming Card skimming involves the illegal copying of encoded information from the magnetic strip of a legitimate card by means of a card reader with the intention to use the data for encoding counterfeit, lost, or stolen cards to transact fraudulently. card Skimming With Handheld Devices Handheld skimming remains a threat in the card fraud environment and is one of the major contributors to Counterfeit card fraud. From 2005 to September 2013 a total of 1 281 handheld skimming devices were recovered by investigators, with 129 of these being seized between January to September 2013. Retrieved handheld skimming devices (2005 to 2013) 2013 Jan-Sep 2012 2011 2010 2009 2008 2007 2006 2005 0,0 48 0,0 44 0,0 90 0,0 129 0,0 143 0,0 194 0,0 190 0,0 206 0,0 237 During 2013 the majority of handheld skimming devices were recovered in Gauteng (57), Mpumalanga (21) and the Western Cape (12). There was an increase in the number of devices recovered in Limpopo (11 compared to three in 2012). 23 CARD FRAUD 2013
Provincial distribution of retrieved handheld skimming devices (Jan to Sep 2013) Eastern Cape 5% Cards can be skimmed at ATMs or at points of sale and therefore bank clients are urged Northern Cape 1% North West 4% Western Cape 9% Free State 6% not to accept assistance from anybody at ATMs and not to let their cards out of sight when Mpumalanga 16% transacting. Limpopo 9% Gauteng 44% KwaZulu-Natal 6% What does a handheld skimming device look like? Card skimming The images below are examples of handheld skimming devices recovered. Although there are many models available, handheld skimming devices are usually small black objects that fit into the palm of the hand and can easily be hidden in a pocket. The public is urged to report any individuals importing or using these devices to steal card data, to the police. 24 CARD FRAUD 2013
Card Skimming With ATM Mounted Devices Between 2007 to September 2013, 177 ATM mounted skimming devices were recovered by the banking industry and law enforcement. During January to September 2013, a total of 33 devices were recovered. Retrieved ATM mounted skimming devices (2007 to 2013) 2013 Jan-Sep 2012 2011 2010 0,0 33 0,0 36 0,0 43 0,0 53 2009 0,0 9 2008 0,0 2 2007 0,0 1 ATM mounted skimming devices were retrieved in five provinces. Gauteng had the highest number retrieved (22), followed by KwaZulu Natal (5), Western Cape (3), Mpumalanga (2) and one device in Limpopo. ATM clients are encouraged to be on the lookout for foreign objects attached to ATMs and are urged to always conceal their PIN number when transacting. What does an ATM mounted skimming device look like? This device is difficult to recognise as it is manufactured to match the look and feel of the ATM. Therefore it is advisable to inspect the ATM machine and cover the PIN pad with your free hand when entering the PIN. Card skimming 25 CARD FRAUD 2013
Important tips to avoid becoming a victim of card fraud DOs: If you think the ATM is faulty cancel the transaction immediately, report the fault to your bank and transact at another ATM. Be cautious of strangers offering help as they could be trying to distract you in order to get your card or PIN. If you are disturbed or interfered with whilst transacting at the ATM, your card could be skimmed by being removed and replaced back into the ATM without your knowledge. Cancel the transaction and immediately report the incident using your Bank s Stop Card Toll free number which is displayed on the ATM or on the back of your bank card. Choose familiar and well-lit ATMs where you are visible and safe to transact. Know what your ATM looks like so that you are able to identify any foreign objects attached to it. If your card is retained, do not leave the ATM before you have cancelled your card by calling your bank s call centre using your own mobile phone. Shield the hand that is typing your PIN number so that nobody can see your PIN number. Never let the card out of your sight when making payments. If you have debit, cheque and credit cards, don t choose the same PIN for them all so that if you lose one, the others will still be safe. Keep your transaction slips and check them against your statement to spot any suspicious transactions which must be queried with your bank immediately. DON Ts: Do not ask anyone to assist you at the ATM not even the security guard or a bank official. Rather go inside the bank for help. Never force your card into the slot as it might have been tampered with. If there are signs that the ATM has been tampered with, do not insert your card. Never write your PIN on your card. Never write down your pin and store it in the same location as your card. 26 CARD FRAUD 2013
Industry measures to prevent card fraud Protection of Client Data SA banks subscribe to PCI DSS standards as set by MasterCard, Visa as well as local legislation to protect client information inclusive of card data. Banks also urge clients to become PCI aware as data security is of utmost importance. Chip & PIN Whilst the roll out of Chip & PIN credit cards has reached critical mass, these cards still have information encoded on the magnetic strip. Bank clients should remain vigilant as this information can still be skimmed. Improvement of internal systems and processes The SA banking industry continuously invests in technology to assist with the detection, prevention and reduction of bank card fraud. Crime trends are followed closely and adjustments to monitoring systems are made to mitigate associated risks. SMS notifications for transactions on card accounts are an effective detection tool and banks encourage customers to utilise this service. Sharing of information and combating of card crime SABRIC provides the industry with a national industry view of crime threats and trends and facilitates a collective approach to the combating of card fraud in partnership with the SAPS and the National Prosecuting Authority as well as other stakeholders in the fight against crime. Dedicated police reaction teams in provinces where card fraud is prevalent, has contributed significantly to the combating thereof with numerous arrests and successful prosecutions. Crime awareness SABRIC and the banking industry regularly partner with the media to alert bank clients to new modus operandi and also provide crime prevention tips to card users. 27 CARD FRAUD 2013
SABRIC House, Hertford Office Park, 90 Bekker Road, Vorna Valley, Midrand P O Box 3682, Halfway House, 1685 Tel: +27 11 847 3000 Fax: +27 11 847 3001 Email: info@sabric.co.za www.sabric.co.za Facebook: www.facebook.com/sabricza Twitter: www.twitter.com/sabric
Future threats Counterfeit card fraud facilitated by the theft of card data through card skimming, remains a threat to the banking industry. CNP fraud will continue to increase as seen in European countries where Chip & PIN cards were introduced. Bulk data compromises of card holder data through infection of computer systems with malware will increase. As seen in other EMV compliant countries such as the UK, Lost and/or Stolen card fraud will increase. 28 CARD FRAUD 2013