Spike in ATM card-swapping

CARD-swapping at ATMs appears to be how most “banked” South Africans are currently being caught by criminals.

Every year a snapshot of bank crime trends is provided by the Ombudsman for Banking Services’ annual report.

The latest report (2014), released on Friday shows that complaints about ATMs still make up by far the bulk of complaints, and were 7% up on the previous year, but it was card-swapping at ATMs which showed the most dramatic leap – from 27% of ATM complaints in 2013 to a whopping 60% last year. How is it done? Criminals distract ATM users as they enter their PINs, then press cancel, whip the card out and replace it with another.

Then off they go with the card and the PIN.

And here’s the bad news for victims of ATM fraud: of the 1 768 complainants which consumers made against their banks last year, the Ombud’s office found in favour of the bank in 79% of cases.

In other words, only one in five (21%) of those who lodged a complaint against their bank’s handling of their fraud complaint, got a ruling in their favour, based on some form of negligence on the part of the bank concerned.

Overall, the percentage of cases settled in favour of the consumer was down quite significantly on the previous year’s: in 2013, 40% of cases were decided in the consumer’s favour, compared to last year’s 31%.

One of the reasons for that, said Ombudsman Clive Pillay, was “the impasse reached on a particular internet banking issue”. “This matter is currently before a judge as a test case,” Pillay wrote in his report, “and if the judge finds that there is indeed a duty of care on a beneficiary bank when opening an account, then it is likely that 19% more awards would be made to consumers for cases closed pending the outcome of the test case, bringing that total to 50%”.

Justice Malan has since found that there ought to be a duty of care on the beneficiary bank, but, Pillay said, the judge felt that the only way to “crystallise” this duty of care would be to hear oral evidence before making a finding.

“That would require the initiation of a court case and we have not yet decided on how to approach the matter.

“One of the possibilities we are considering is amending our terms of reference so as to enable us to investigate whether both banks have complied with the duty of care and are not guilty of any negligence or maladministration.”

-Wendy Knowler 


Leave a Reply