Crime
2012 CARD FRAUD LOSSES DOWN
Security efforts of the banking industry, law enforcement
and consumers are changing card fraud patterns.
T
he latest figures for banking industry card fraud losses
released by the South African Banking Risk Information
Centre (SABRIC) show that credit card and debit card fraud
levels have decreased.
The banks’ gross credit card fraud losses for January to September
2012 amount to R300,4m, an 18% decrease from gross losses of
R367,4m in 2011. Debit card fraud gross losses amounted to R204m
in 2012, compared to R219,9m in 2011, a 7% decrease.
Gauteng, Western Cape and KwaZulu-Natal account for 91% of
credit card fraud losses recorded in 2012, as was the case in 2011.
The bulk of debit card fraud losses during 2012 occurred in Gauteng,
KwaZulu-Natal, the Eastern Cape and the Western Cape.
‘The downward trend in card fraud losses this year is attributed
to the efforts of the banking industry, law enforcement and most
significantly, bank customers, who are seemingly responding to
the industry’s calls for safe banking practices,’ said SABRIC CEO
Kalyani Pillay. ‘We encourage all bank customers to continue this
trend as it supplements the banking industry’s efforts to achieve a
safe banking environment.’
Lost and stolen credit card fraud decreased by 15%, from R18,3m
in 2011 to R15,6m in 2012. The downward trend in incidents of credit
card fraud due to lost and stolen cards began in 2009 and this reflects
the impact of the rollout of chip and PIN cards and other banking
industry’s card fraud prevention strategies.
Counterfeit card fraud decreased by 45% in 2012 and contributes
38% of overall credit card fraud gross losses. This is a significant trend
shift as counterfeit card fraud was the single biggest contributor to
the banking industry’s card fraud losses for the past three years.
However, SABRIC says that Card Not Present (CNP) fraud
increased by 16%, from R133,4m in 2011 to R154,8m in 2012, and
contributed 51% of the total credit card fraud losses in 2012. CNP
is now the single biggest contributor to credit card fraud losses on
SA-issued credit cards. In addition, the banking industry’s credit
card fraud losses from false-application fraud increased by 226%,
from R4,1m to R13,4m. Losses related to account-takeover fraud
have also increased by 38%, from R0,8m in 2011 to R1,1m in 2012.
‘CNP fraud losses have been on the rise steadily over the past
few years,’ Pillay explains. ‘This is not an unusual trend, as a similar
pattern is witnessed in most EMV-compliant countries such as the
UK and Australia. Criminals tend to use stolen card information
to perform online purchases as they are deterred by chip and PIN
technology.
‘The percentage increase in false-application fraud should also
be seen in the context of the low-base figures representing this
crime trend. The banks have recently acquired access to the Home
Affairs National Identification System (HANIS), and we are highly
optimistic that the roll-out of this system in bank branches will have
an impact on fraud losses due to falsified documentation.’
‘The banking industry’s debit card fraud losses in 2012 are mainly
attributable to “counterfeit debit card