iFacts
Credit Card Fraud: Fact Sheet
What is credit card theft and fraud?
Credit card fraud is when criminals steal your credit card to source your funds illegally. It is
a serious breach of security.
The fraudster will attempt to forge the cardholder’s signature to prevent suspicion.
Similarly, it is when criminals acquire your credit card details and commit fraudulent
transactions at payment points or online. Counterfeit cards may also be produced in the
case of identity theft.
Credit card is often peripherally connected to the more serious crime of identity theft.
Identify theft happens when someone obtains your personal information, such as credit
card details or identity number to, commit fraud and other crimes.
Victims of identity and card fraud suffer financial loss, can be blacklisted and struggle to
regain their good financial reputation. It can cause psychological stress in certain cases.
What are the main types of credit card fraud?
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� Stolen cards
� False applications
� Credit cards not received
� Counterfeit cards
� Card number misuse
How serious is credit card fraud in South Africa?
It is believed that credit card is limited to 0.1% of all card transactions in the United States.
After a spike of cyber crime in 2008, the incidents of identity theft, which is most often
associated with card fraud, has decreased since 2008. This is according to the Federal
Trade Commission.
In South Africa, while we have seen a significant decrease in debit card fraud in recent
years, there has been an increase in credit card fraud. For example, in 2012 the banking
sector lost R204 million in debit card fraud and over R300 million in credit card fraud. In
2013, credit card fraud increased by 22% to R366 million. This is according to the South
African Banking Risk Information Centre.
What are the majority of purchases made with stolen credit cards?
Liquor stores, supermarkets, house furnishing shops, family clothing stores and
restaurants. This is according to Absa bank, in a statement made in its Fraud Awareness
Week.
What is being done to stop credit card fraud?
Recently, government has started to introduce the Protection of Personal Information
(Popi) Act. In part, this act will regulate the collection and dissemination of personal
information and data. It seeks to protect an individual’s right to privacy, especially online.
Banks and financial service providers have stepped up their security measures, especially
for online banking transactions.
They strive to monitor your money and investigate
security breaches.
However, education and advocacy is still the best way to stop card fraudsters. Some
common sense and vigilance goes a long way in protecting against ID theft and card crime.
What can you do to prevent credit card fraud as a credit card holder?
Here are some no-cost measures you should use to protect yourself against criminals
wanting to get at your money:
Out and about
 � Sign your new credit card as soon as the bank issues the card
 � Never write down your PIN number or give it to anyone else
 � When making a payment, ask to make the credit card payment in a place where
the card is highly visible to you at all time – never let the card out of your sight!
 � Don’t allow yourself to be distracted when making a card payment
 � Make sure that you get your own card back after every purchase
 � Tear up or destroy your credit card receipts before throwing them away
Online
 � When shopping online, only use your credit card details on a trusted and secure
website
 � Make sure you can see a ‘padlock’ symbol in the browser line and check that
browser shows a ‘https:/’ to indicate a secure site
 � Don’t use public or hotel computers to make online purchases—ever!
 � Clear cookies, caches and log-in information from your computer after every
session
 � Most importantly, change your login and password information every month.
Always choose strong passwords for extra security
What can I do to prevent credit card fraud as a business or merchant?
Here is some practical advice to follow:
� Examine the card to ensure all the security features are present
� Check the signature on card against the one on sales voucher
� Check the name on the front of card with the person standing in front of you – a
Mrs. Smith that is man is a red flag
� Phone for authorisation if you are suspicious for any reason
� Ask for identification if you are still not satisfied
� Don’t let the card holder hurry, intimidate or even charm you
How important is the signature on a credit card?
Your signature on the back of a credit card is used as verification method. Merchants must
verify that the card signature corresponds with the sales voucher.
In some cases, the merchant may be liable for the transaction amount if the two
signatures differ significantly.
What should you do if your credit card is stolen or you become aware of it
being used
fraudulently?
You should report lost or stolen credit cards to your bank immediately. Keep the bank’s
‘Stop Card’ number on your cell or smartphone, and keep it in a handy place at the home
or office too.
Furthermore, write down your credit card number, expiry date and security digits at the
back of the card. This will help you when you must give the bank details about the theft or
fraud.
Keep in mind, you will need to follow up on replacement cards and ensure you are issued
new account numbers by the bank.
Who bears the cost of illegal credit car transactions?
Cardholders
The majority of fraud losses are paid by your bank. These losses are often covered by lost
card protection insurance. Some banks offer extra or lost card protection—so find out
from your bank when you renew your credit card.
However, in certain scenarios, you may be liable for the losses. This happens if you don’t
comply with the conditions of use, or it can be proven that you were negligible.
Merchants
Merchants may also be held liable if they do not adhere to their merchant contract.
What other tips can one follow to stay safe as a cardholder?
Always monitor your bank and credit card statements. Check your accounts monthly,
going through them line by line. Be on the look out for duplicate amounts and other
suspicious transactions. Compare the purchases against your diary, your spending habits
and location.
On a regular basis, visit your bank to make sure no one has collected any cards on your
behalf. While you are there, make sure your Financial Intelligent Centre Act (Fica)
information is correct and up to date. Similarly, ensure that your post office box number
and mailing addresses are correct and up to date. Many criminals will fill out change of
address forms so that you don’t receive your statements in time and detect the fraud until
it is too late.