Credit card fraud cost South Africa R420-million in the past year and has increased by 146 percent, the South African Banking Risk Information Centre (Sabric) said on Monday.
"It is a frightening picture, it really is," said Sabric chief executive Kalyani Pillay.
"Fraud on RSA issued credit cards has increased by 146 percent between 2005/2006 and 2007/2008. This increase should be understood in the context of a huge rollout of cards by South African banks into the market."
It was estimated in 2006 that there were more than 25,5 million debit cards and 7,2 million credit cards in circulation in South Africa. The amount of money spent using credit cards at point of sale devices increased by 101 percent between 2004 and 2007. The amount of money spent using debit cards soared by 547 percent in the same period.
Most fraud occurred with criminals using lost and stolen cards. However, fraud with counterfeit cards caused the most losses in money terms.
"This card fraud type is the single biggest contributor to overall card fraud losses in 2007/2008," said Pillay, adding that it amounted to R118,3-million in the past year, up from R57,2-million in 2006/2007. Vigorous prevention programmes from banks saw a 67 percent drop in the number of false credit card applications. Fraud valued at R420-million was committed on South African issued credit cards, mainly in South Africa, between 2006/2007 and 2007/2008, said Pillay.
"South Africa mirrors the credit card fraud trends in the UK... Counterfeit card fraud remains the biggest driver of total card fraud losses both in the [United Kingdom] and RSA...
"The total card fraud losses in the UK in 2007 stood at 535,2 million pounds and in RSA it was R420-million between 2006/2007 and 2007/2008."
However, the banking industry prevented fraud valued at R573-million in 2007/2008.
Also, the retrieval of hand-held skimming devices, electronic devises used to steal card data from magnetic strips, increased by an average of 45 percent year-on-year since 2005. "A total of 254 hand-held skimming devices have been retrieved since 2005."
Pillay said these devices were small and easy for criminals to hide. Consumers must never lose sight of their credit cards, she emphasised. (continue reading in a new window)
Credit card fraud cost South Africa R420-million in the past year and has increased by 146 percent, the South African Banking Risk Information Centre (Sabric) said on Monday.
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