Digital tech crime in the spotlight: Interesting tricks used by card fraud criminals

22 May

At the end of 2017 the statistics on card fraud were made available to the public and how interesting they were. A quick review of the stats provided by SABRIC (South African Banking Risk Information Centre) shows that over the course of 2017, credit card fraud increased by 1% while debit card fraud actually decreased by 8.5%!

Why did debit card fraud decrease so much?

According to Kalyani Pillay, the CEO of SABRIC, debit card fraud events took a steep decline as a result of fewer lost and stolen cards. There were also fewer counterfeit cards on the market.

This doesn’t mean that fraud isn’t happening, it’s just that criminals have adjusted their tactics in order to take advantage of innovations in the banking landscape.

Here are the latest fraudsters’ tricks

SABRIC released a list of 7 of the latest tricks used by card fraudsters in South Africa at the moment.

#1. Lost and stolen card fraud
The easiest way for criminals to acquire cards is when they interfere with the physical transaction process. This usually happens at the ATM by opportunistic criminals offering to help people, or devising a way to acquire the card PIN. Cash is then drawn from the card at various machines until the daily limit is reached.

#2. Issued card not received fraud
This is when the criminal collects or intercepts a card before it is delivered to the right person. While most banks ensure that cards are delivered by courier direct to the client’s home, or that the customer personally collects the cars from their branch, some cards are sent by mail. These credit cards, loan cards, clothing and merchandise account cards and similar are then collected by the criminal.

#3. Card falsely applied for fraud
Here, the criminal gathers information on an individual and applies for credit and cards in their name, with their details. The card is then issued and used, racking up a bill which must then be paid for by the innocent party.

#4. Counterfeit card fraud
Criminals with the right equipment and software can steal information from the magnetic strip of an existing card. The information can then be used to create a false card. This is often called “card skimming” and can be done at ATMs.

#5. Speedpoint card skimming fraud
This is when criminals steal legitimate Point of Sale (POS) devices from merchants and then convert them into card skimming machines. This usually goes unnoticed as speed point machines can be replaced with similar machines that don’t belong to the actual company.

#6. Replacement card fraud
Again, theft of personal information plays a role in this type of card fraud. Criminals gather all the relevant information on an individual and then apply for a replacement card which is then handed over to them, ready to use and abuse.

#7. Card not present fraud (CNP transactions)
Certain transactions such as online purchases or mobile purchases don’t require a physical card at the point of purchase. Data breaches, phishing, and malware can be used to gather card information from various sources. This information is then used to complete online and mobile purchases and transfers.

Always make sure that your personal information is protected and that your data is securely backed up to the cloud. If you are looking for peace of mind and a secure backup option, check out the online backup system features at Soteria

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