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‘Alarming’ increase in credit card fraud

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Scammers obtained credit card information fraudulently and utilised it without consumers realising what was happening or without their consent

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THE OMBUDSMAN for Banking Services has reported an alarming increase in credit card fraud.

This is highlighted in the Ombudsman for Banking Services’ review of the first quarter of 2019.

Credit card fraud is theft involving a payment card – either debit or credit – as a fraudulent source of funds in a transaction. The fraudster buys goods or has access to funds using the details of a legitimate card holder.

“Credit card fraud related complaints increased from 12.2% at the beginning of January 2019 to an alarming 19.47% as at end March 2019. It is of great concern that the elderly are more vulnerable to this kind of banking fraud,” Reana Steyn, CEO and Ombudsman for Banking Services, said yesterday.

Statistics gathered in March indicate consumers aged between 61-70 make up 21% of the credit card fraud complaints, while those aged between 71-80 make up 26% and pensioners older than 81 accounted for 11% of the total.

“The types of fraud identified range from vishing, phishing, fraudulent on-line purchasing, and bank reward programmes used to purchase merchandise,” Steyn pointed out.

Scammers obtained credit card information fraudulently and utilised it without consumers realising what was happening or without their consent.

The types of complaints the OBS deals with include fraudsters phoning the client, pretending to be from the bank and notifying them that fraudulent online transactions had been detected. The fraudster advises the client that they will reverse the transactions and asks the client to quote the SMS reference numbers to reverse the “fraudulent transactions”. In this manner the fraudster obtains the “One Time Password” which authorises the transaction.

In other instances, customers are led to believe that they are being contacted by a legitimate bank employee regarding existing services. In this manner, the fraudster gains the client’s trust.

“Credit card fraud is a growing concern as banking systems increase in speed and efficiency,” Steyn pointed out. “At the same time, fraudsters apply more sophisticated tactics to defraud and rob customers of their hard-earned money and savings. All bank customers, and particularly the elderly, need to be knowledgeable and vigilant about their preferred banking channels.”