The 3 most common scams used to defraud bank customers in South Africa

Stolen-card, counterfeit-card and card-not-present (CNP) fraud are the three most prevalent types of fraud used to defraud customers, according to Alfred Ramosedi of African Bank.

He noted that criminals are getting more sophisticated in their fraud scams, the three modus operandi listed above are still the most prevalent and consumers should familiarise themselves with these scams and the means to protect themselves.

Stolen cards

“Stolen-card fraud is pretty self-explanatory,” said Ramosedi. “Criminals steal genuine bank cards together with the correct pin numbers and then use these cards immediately at the nearest ATM to withdraw cash followed by purchases at stores until the account is either empty or the card stopped.”

Counterfeit-card fraud

Counterfeit-card fraud is slightly different in that a card is manufactured fraudulently and not genuinely issued by a bank. Criminals can do this by using compromised card data. The data is usually compromised through skimming.

Ramosedi says skimming devices can read and store card data on the magnetic strip of a genuinely issued bank card.

“The problem is hand-held skimming devices are quite small and are not easily detectible. ATM skimming devices are fixed onto the machines and are even more difficult to see so criminals often get away with skimming undetected,” said Ramosedi.

Although these counterfeit cards can only be used at an ATM if the correct pin is also used, most criminals generally manage to view the pin with a technique called shoulder surfing.

“Shoulder surfing is an effective way to get information in crowded places because it’s relatively easy to stand next to someone and watch as they fill out a form, enter a pin number at an ATM machine, or use a calling card at a public pay phone.”

Card-not-present (CNP) fraud

With CNP fraud, the data is compromised in a variety of ways. Ramosedi noted this can range from the actual physical theft of data off a genuine card to large scale data breaches usually carried out by syndicates.

“While it may be difficult for a consumer to avoid a large-scale breach, they can do much to mitigate the risk of the low tech physical theft.”

“Many people do not even realise that a criminal who can memorise or write down the card number of their card, its expiry date and the three digits on the back of the bank card, can quite effectively start transacting fraudulently on the internet or phone just as if they were the genuine card holder.”

Similarly if a merchant has copies recording the front and back of various bank cards, these can be stolen and used fraudulently.

Read: SARS will be investigated for not paying out tax returns

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The 3 most common scams used to defraud bank customers in South Africa