Durban - Online shoppers should be extra vigilant with the festive season approaching as credit and debit card fraud related to internet purchases is on the rise.
According to a statistical report by the SA Banking Risk Information Centre (Sabric), credit card fraud gross losses, when the card or cardholder were not present during the transaction, had increased by 12.5% from R168 million in 2015 to R189 million this year.
However, overall credit card fraud decreased by 28.6% from R353.3 million last year to R252.2 million in 2015 (both over a nine-month period from January to September) with an increase of 8.3% for debit card fraud.
The report said Gauteng had the highest losses due to all types of credit and debit fraud followed by the Western Cape and KwaZulu-Natal.
Sabric said card-not-present (CNP) fraud was at the “highest level” reported, but also noted that it was much lower than the growth in online or mobile transaction volumes.
CNP fraud for debit cards also rose, from R48 million in 2014 to R55.8 million from January to September this year.
About 66% of losses related to credit cards and 65% to debit cards occurred at merchants outside South Africa.
The fraud usually occurred during online shopping transactions, when purchases were done by mail order and when orders were made for goods by telephone.
Fraudsters obtained card and personal information of the cardholder from phishing, discarded receipts and previous transactions.
The report said the increasing number of the transactions was due to continued growth in internet and mobile purchases and more sophisticated debit cards which now allowed for online purchases.
Criminals were turning to these kinds of transaction because of better technology in chip and pin cards to guard against fraud.
Most of the losses for both debit and credit cards were travel-related purchases of airline tickets, vehicle hire and hotel accommodation.
The organisation said the local industry had implemented several methods to curb the growth in fraud by ensuring companies adopted measures to protect cardholder information and by ensuring that online transactions could be authenticated by a bank through 3D Secure for domestic transactions.
Another concerning trend, the report noted, was a sharp increase in lost and stolen debit card fraud – “shoulder surfing” for personal information or swopping of cards.
Tips to counter credit card fraud
The following tips, supplied by Candice Sutherland, Business Development Consultant at SHA Specialist Underwriters, are some of the measures shoppers can take to better guard against credit card fraud.
* Do not use public computers for online banking.
* Before making purchases online, make sure that the site is 3D Secure.
* Opt for websites that make use of reputable third-party payment processors, such as PayPal.
* Ensure that you receive SMS updates from your bank notifying you of any activity on your accounts.
* Pay attention to the website address. When an internet address is prefixed with http:// it is not as safe as a site address prefixed with https:// (the ‘s’ indicating a secure site).
* Review your bank statements and reconcile your accounts regularly.
* Ensure that there is adequate antivirus and security software installed and enabled on the computer you use for internet banking.
THE MERCURY