Credit Card fraud begins either with the theft of the physical card or with the compromise of data associated with the account, including the card account number or other information that would routinely and necessarily be available to a merchant during a legitimate transaction[dubious – discuss]. The compromise can occur by many common routes and can usually be conducted without tipping off the card holder, the merchant or the issuer, at least until the account is ultimately used for fraud. A simple example is that of a store clerk copying sales receipts for later use. The rapid growth of credit card use on the Internet has made database security lapses particularly costly; in some cases, millions of accounts have been compromised.
Stolen cards can be reported quickly by cardholders, but a compromised account can be hoarded by a thief for weeks or months before any fraudulent use, making it difficult to identify the source of the compromise. The cardholder may not discover fraudulent use until receiving a billing statement, which may be delivered infrequently. Cardholders can mitigate against this fraud risk by checking their account frequently to ensure constant awareness in case there are any suspicious, unknown transactions or activities.
Perpetrators use a variety of Card Fraud methods and keep changing their approach to trick their victims. The most common Card Fraud types in South Africa at present include Counterfeit Card Fraud, Lost and Stolen Card Fraud, False Application Fraud and Card Not Present Fraud. Any Credit Card Fraud Help
is difficult for the banking industry because perpetrators prey on the vulnerabilities of bank customers and do not target banking systems.
Card skimming involves the illegal copying of encoded information from the magnetic strip of a legitimate card by means of a card reader. This could occur either at ATMs or points of sale.
“These devices have the ability to read and store the information on the magnetic strip of a card when the card is swiped through the device,” said Sabric CEO Kalyani Pillay.
The compromised information is then downloaded onto a computer and used to encode another card. Specialised software is used in both instances. Criminals also do their utmost to steal the victim’s PIN so that they can use the counterfeit card to either draw cash or make purchases.
Often card skimming devices and hidden cameras are installed on ATMs to steal card information and PINs (through a small camera) from users. Criminals purposefully design these devices to ensure they blend with the ‘look and feel’ of ATMs.