Bank card fraud edges R800m

Report shows massive scale of theft from SA accounts

Image: Gallo Images/ iStock

Almost R800-million was stolen from South African bank accounts last year – mostly through criminals fraudulently obtaining clients’ card information.

This is revealed in the latest South African Banking Risk Information Centre (Sabric) report detailing bank card fraud for last year.

The report states that of the R778.9-million stolen out of South African bank accounts last year, R436.7-million was stolen from credit cards and R342.2-million from debit cards. Of the total, R416-million was taken through card-not-present (CNP) scams – an emerging trend used by criminals to drain bank accounts.

CNP fraud, which occurs mostly online, is when neither the card nor the cardholder is present for a transaction.

The details are attained through various methods including e-mail phishing scams and fake online websites.

The report highlighted card-not-present fraud as the most prevalent banking fraud currently used by syndicates.

Credit card holders lost R318.4million last year through CNP scams while debit card holders lost R98-million in similar scams.

Other losses were due to card skimming, lost or stolen cards, and legitimate users’ accounts being hijacked by criminals.

Of the R436-million stolen in credit card fraud, R233.3-million was stolen by syndicates operating outside the country and R203.5-million in South Africa.

The provinces targeted by the credit card syndicates include Gauteng, which saw R99-million stolen, followed by the Western Cape with R32.4-million, KwaZulu-Natal with R24.5-million and the Eastern Cape with R9-million.

Sabric lists the top five African countries which were complicit with credit card fraud transactions as Kenya, Ethiopia, Zimbabwe, Zambia and Mozambique – which accumulatively involved almost R9-million.
The other countries implicated include Ireland, the US, Malta, the UK, China, Indonesia and India.

Debit card fraud mainly happened within South Africa.

Last year, R246-million was stolen from debit accounts in South Africa and R95.5-million outside the country’s borders.

Police spokeswoman Captain Sandra Janse van Rensburg said various cases of banking fraud had been reported in the metro.

“The main types . . . are deposit and online phishing scams.”

Asked how many cases were reported a month, Janse van Rensburg said only that several cases were under investigation.

Sabric chief executive Kalyani Pillay said credit card-related CNP fraud was listed as the leading contributor to fraud losses.

“Criminals are always adjusting their tactics to take advantage of innovations in the banking landscape,” he 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.”

Asked how banking clients’ information was attained by criminals and how the syndicates operated, Pillay said: “If the client travelled, the card payment platform could have been used and compromised in any country.

“If it is CNP fraud, then location is no obstacle, because card information makes it possible to do a transaction anywhere.

“With regard to counterfeit card fraud in Indonesia, for example, the track data [information on the mag strip of the card] can be sent anywhere in the world because it is digital.”