The downside of Christmas cards

With no regulations forcing banks to notify clients that fraudulent transactions involving their accounts have been detected, and the festive season fast approaching, consumers are urged to be extra vigilant.

Between January and September, South Africans lost more than R500-million due to credit card and debit card fraud, and bank card cloning is expected to increase this month.

In the space of a week several Capetonians have had their bank accounts cleared out.

On Thursday night, Times photographer Shelley Christians was alerted by SMS that she had just bought an airline ticket for R3078.

"I felt sick; that was my bond money. It's absolutely insane," she said.

"I'm always so vigilant with my card because I know card skimming happens so frequently."

Christians immediately phoned FNB's fraud hotline and the bank confirmed the transaction and cancelled her card.

On Friday, she was notified that it would take a minimum of three days to get a new card.

"It's not just the theft but the inconvenience," Christians said.

She suspected the skimming was an inside job because she had received a new card two weeks earlier.

She said the cards of two colleagues had also been cloned in the past month.

In the seaside town of Gordon's Bay, a holidaymaker realised her bank account had been emptied only when she went to fill up with petrol.

After notifying the bank, she was told the theft was likely to have occurred at the local supermarket, which had been red-flagged as a hotspot for card fraud.

But, according to Kaylani Pillay, CEO of the SA Banking Risk Information Centre, there is no requirement for banks to notify the public or retailers of card fraud.

"We are not aware of the existence of any such obligation or regulations," she said.

Pillay said credit and debit card fraud had cost South Africans more than R500-million between January and September - but that was 45% down on the corresponding period last year.

"However, the counterfeiting of debit cards still remains problematic and counterfeit debit card fraud constitutes 97% of all fraudulent debit card transactions.

"Eighty-three percent of these debit card fraudulent transactions occur at ATMs," Pillay said.

The cost to banks, which are required to reimburse a client when fraudulent activity can be proved, accounted for 38% of the banks' credit card losses, she said.

Online transactions accounted for 51% of the industry's losses.

Counterfeit debit card fraud made up 97% of all debit card fraud losses between January and September.

Pillay said card-related fraud occurred mostly in and around the economic hubs of Johannesburg, Cape Town and Durban.

With economic activity certain to increase over the Christmas season, the likelihood of bank card fraud is bound to increase.