Card fraud: don’t transact in the open

Free internet connectivity provides an opportunity for fraudster.

woman on the phone with credit cardFree internet services are the hunting grounds of fraudsters who use remote devices to log keystrokes on your laptop when you transact online, says Henk Vermeulen, card fraud specialist at FNB.

“Free internet services such as wi-fi hotspots and internet provided by hotels are not secure and you should never do any online transactions such as online banking or purchasing items off a website,” says

Vermeulen who explains that fraudsters are able to sit in nearby areas with a small device on the back of their laptop that is capable of logging up to 10 million keystrokes. This means they can record your bank account number and your PIN while you are transacting. Vermeulen says this type of fraud is increasing and the banks saw a significant uptick during the World Cup when tourists came to South Africa and used free internet platforms to do transactions, only to discover when they returned home that their bank accounts had been compromised.

Vermeulen says consumers also need to be vigilant when transacting online to ensure they are on a genuine site. The web address should always start with https and there should be a padlock icon on the site. If you are in doubt, before transacting, call your bank’s fraud division to verify the site.

Vermeulen says the banks are also seeing an increase in fraud as a result of “card not present” transactions where customers provide their card details and CVV number (on the back on the card) telephonically when purchasing goods. Fraudsters will advertise products such as slimming powders with a “three-day trial period”. What they are really after is card details; they are not really trying to sell the goods. It is important that you only provide your card details to a trustworthy merchant.

The latest banking survey run by Visa and FNB as part of the 9th annual Card Security Week found that generally South Africans are still too lax when it comes to adhering to safety measures to keep their PIN codes safe.

The online survey, which was conducted to understand South African consumers’ viewpoints on card fraud, revealed that just over 50% of bank card users keep their PIN confidential, while 38% of the respondents admitted that one other person knows their PIN. And 20% of all respondents said they have written down their PIN, creating a high risk of card fraud.

“PIN-enabled transactions are considered to be authorised by the card-holder – as your PIN number is unique, and should not be shared. Should a dispute arise on an ATM withdrawal or a purchase at a point of sale and a PIN has been used, FNB will consider this a legitimate transaction. The incident will be investigated to determine if the card has been cloned. If there was no skimming or card cloning, FNB will not refund the customer.  PIN security is something each customer should make a priority, as your PIN is your ‘first-line of defence defence’ against card fraud,” says Johan Maree, CEO of FNB Credit Card.

Skimming and cloning remains the biggest card fraud threat to customers, from FNB’s perspective, and Vermeulen says the banks still experience a high level of card skimming from point of sale transactions where the shop assistant or waiter makes a copy of your card while you are not looking. Although Vermeulen would not reveal the names of the restaurants, he says there are many restaurants that have been identified as having staff who are involved in skimming customers’ cards. “It is important to never let your card out of your sight,” says Vermeulen.

Customers also need to take care when transacting or when at an ATM. Fraudsters will try to distract them in order to obtain their card for a few seconds to skim details on the magnetic stripe, they then view customers entering their PINs.

Our levels of awarenessThe survey revealed that South Africans are vulnerable to fraud through our actions:

  • 1 in 5 consumers have written down their PIN in case they forget it
  • 1 in 5 consumers do not think it necessary to cover your one hand with the other hand when typing in your PIN at an ATM or store
  • 46% of customers have shared their PIN with one or more people
  • 29% of people surveyed have been a victim of fraud, with card swopping at an ATM or card cloning the most common
  • 78% of consumers feel that it is their own fault if they give their PIN to a family member and money is drawn from their account without their permission
  • 55% of consumers feel it is both their and the bank’s responsibility to safeguard their bank card

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