These are the worst bank card fraud scams in South Africa

The South African Banking Risk Information Centre (Sabric) has released its Card Fraud Statistics for 2017.

The report found that there was overall decrease in card fraud over the course of the year, as debit card fraud decreased by 8.5% (from R373.9 million in 2016 to R342.2 million in 2017) while credit card fraud increased by 1% (from R434 million in 2016 to R436.7 million in 2017).

Sabric CEO, Kalyani Pillay said that the decrease seen in debit card fraud is due to a reduction in lost and/or stolen and counterfeit card fraud.

“Criminals are always adjusting their tactics to take advantage of innovations in the banking landscape,” she said. “However, our collaborative model ensures that we, together with our banks and partners, are responsive and agile, enabling these crimes to be addressed efficiently and effectively.”

The report found that Card Not Present (CNP) fraud is still the leading contributor to gross fraud losses in South Africa, and showed an increase of 7.4% from the previous year, accounting for 72.9% of the losses on SA issued credit cards.

“CNP debit card fraud showed a more significant increase of 60.7% due to certain banks allowing online Card Not Present transactions on debit cards,” Pillay said.

In addition, lost and/or stolen credit card fraud saw a 44.5% increase and accounted for 5.9% of overall gross fraud losses in 2017, with 76.1% of fraud occurring in South Africa.

These criminals mostly stole, swopped or installed card entrapment devices at ATMs and then shoulder surfed victims to obtain their PINs, Pillay added.

However, 2017 also saw a significant decrease in counterfeit card fraud – continuing the trend for 2016. Counterfeit debit card fraud saw a decrease of 32.2%, with losses of R65.3 million, while counterfeit credit card fraud decreased by 23.2%, with losses of R83.6 million.


Breakdown of  worst fraud types

  • Counterfeit card fraud – R83.6 million stolen in 2017

Counterfeit card fraud is 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, stolen and old cards are re-encoded with information stolen from a genuine card for purposes of committing counterfeit card fraud. The information needed for counterfeit card fraud is usually stolen through card skimming.

  • Card not present card fraud  – R318.4 million stolen in 2017

CNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting the transactions.

  • Lost/stolen card fraud – R25.7 million stolen in 2017

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 refers to fraud that results from a fraudulent transaction that is performed on a validly issued card that was stolen from a legitimate owner.

  • Account takeover fraud – R2.5 million stolen in 2017

Account takeover fraud takes place when an existing account is taken over by someone posing as the genuine account holder, who 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 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.

  • Not received issued card fraud – less than R1 million stolen in 2017

Not received issued card fraud relates to the interception of genuinely issued cards before they reach the authentic customers. Impostors then use intercepted cards fraudulently.


Read: These are the most complained-about insurance companies in South Africa

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These are the worst bank card fraud scams in South Africa