Millions of rands lost to increasing bank card fraud

Millions of rands have been lost due to bank fraud
Millions of rands have been lost due to bank fraud
Image: 123RF/ kritchanut

South Africans lost more than R873m due to bank card fraud last year, an annual increase of 18%. This was revealed by the SA Banking Risk Information Centre (Sabric) in its annual crime statistics report released on Wednesday.

The report shows that combined gross card fraud losses on South African issued cards surged by 18% with credit card fraud increasing by 18.4% and debit card fraud rising by  17.5%.

Card Not Present (CNP) fraud on credit cards remained the leading contributor to gross fraud losses, accounting for 79.5% of all losses. CNP debit card fraud showed the greatest increase in losses at 62.3% due to the enablement of Card Not Present transactions on debit cards.

Lost and stolen debit card fraud amounted to 42.5% of all debit card fraud and bank customers continued to fall victim to fraud at ATMs.

Sabric said criminals often approach the victims under the pretext of being helpful, and in many instances even pose as a bank official. They then steal the victim’s bank card and shoulder-surf to obtain the PIN.

Last year, more than 23,000 fraud incidents across banking apps, online banking and mobile banking were recorded, amounting to more than R262m in losses.

Other highlights of the report include:

- mobile banking incidents showed a rise of 100% with gross losses of more than  R28m;

- online banking incidents swelled by 37.5% with losses of more than R129m;

- banking app incidents surged by 55.4% with losses of R104m; and

-SIM swops in the mobile banking space saw an increase of more than 200% to 11,077 incidents.

Sabric CEO Kalyani Pillay said the organisation was concerned about the increase in various crimes involving banking platforms.

“We have seen a sharp increase in vishing incidents, where criminals phone bank customers, lead them to believe that they are speaking to the bank or a legitimate service provider and use social engineering tactics to manipulate them into disclosing their confidential bank card details, as well as other personal information, Pillay said.

“A bank will never call you to ask for this information. If you receive such a call, put the phone down immediately.” 

Pillay added that to fight these crimes needed a collective effort of banks, their customers and law enforcement to win.

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