Stolen-card, counterfeit-card and card-not-present (CNP) fraud are the three most common methods of defrauding customers, Alfred Ramosedi, a sales and marketing executive at African Bank, says.
Ramosedi says that while criminals are getting more and more sophisticated in their fraud scams, these three types of fraud are the ones consumers are most likely to encounter and should protect themselves against.
Stolen-card fraud: Criminals steal bank cards together with the customers’ PIN numbers and then immediately withdraw money from ATMs, or make purchases at stores until accounts are empty or cards are stopped.
Counterfeit-card fraud: This type of fraud is slightly different, in that a card is manufactured fraudulently, not genuinely issued by a bank. Criminals can do this by using compromised card data, usually acquired through skimming. Ramosedi says skimming devices can read and store card data on the magnetic strip of a genuine bank card.
“Hand-held skimming devices are quite small and are not easily spotted. ATM-skimming devices are fixed onto the machines and are even more difficult to see, so criminals often get away undetected,” Ramosedi says.
Although these counterfeit cards can only be used at an ATM if the correct PIN is used, most criminals generally manage to view the PIN with a technique called shoulder surfing.
“In crowded places it’s relatively easy to stand next to someone and watch as they enter a PIN number at an ATM machine,” Ramosedi says.
CNP fraud: With this fraud, the data is compromised in a variety of ways, ranging from actual physical theft of data off a genuine card to large-scale data breaches usually carried out by syndicates. While it may be difficult for a consumer to avoid a large-scale breach, you can mitigate the risk of physical theft, Ramosedi says.
He says criminals who can memorise or write down the card number, its expiry date and the three digits on the back of the bank card, can transact fraudulently on the internet or phone as if they were the genuine card holder.
“Similarly, if a merchant keeps copies of the front and back of bank cards, these can be stolen and used fraudulently,” he says.
Ramosedi offers card holders the following tips:
* Review your account statements regularly and query any suspicious or unfamiliar transactions with your bank immediately.
* When shopping online, place orders with your card only on secure websites.
* Do not send emails that quote your card number and expiry date.
* Ensure that you get your own card back after every purchase and always ask that your card be swiped in front of you.
* Never write down your pin or disclose it to anyone.
* Report lost and stolen cards immediately to your bank.
* Destroy your credit card receipts before discarding them.
* Sign your card on the back signature panel as soon as you receive it to stop anyone else from taking ownership or trying to use it.
* Don’t allow anyone to use your debit or credit card. Only the person to
whom the card was issued is authorised to use it.
* If you have a debit, cheque and credit card, don’t choose the same PIN for all of them, so that if your PIN is compromised on one card, the others won’t be affected.
* Make a list of all your cards and their numbers and store it in a safe place.
* While transacting, always keep an eye on the ATM card slot to ensure that your card is not taken out, skimmed and replaced without your knowledge.
* Should an ATM retain your card, contact your bank and block your card before you leave the ATM.
* Subscribe to your bank’s SMS notification service so that you are kept informed of any transactional activity on your account.
* Save your bank’s phone number on your phone for easy access in case of emergency.
* Do not use an easy PIN number and avoid obvious choices like birth dates and first names.