Due to the various factors that come into play when determining liability for card skimming fraud, it is vital that both consumers and merchants take precautionary measures to avoid becoming a victim.
This is according to Anton Meyer, executive head at SHA Specialist Underwriters, who notes due to each case being different, determining who is responsible for the loss can be challenging.
It is becoming increasingly important for both consumers and establishments to be vigilant about card fraud, especially during the busy festive season, says Meyer.
While most people may automatically think the bank handling the transaction is responsible for the loss, the bank is not necessarily liable if the consumer or merchant has not taken proper care, says Meyer.
According to the South African Banking Risk Information Centre's (Sabric) recent report, Skimming (be it with handheld or ATM mounted devices or the new POS skimming) is still a common modus operandi used by criminals to obtain cardholder information.
Card fraud has decreased by 28.6% from R353.3 million in 2014 to R252.2 million in 2015 with an increase of 8.3 % for debit card fraud in the same period, says the report.
A total of 892 handheld skimming devices were recovered from 2010 to September 2015 by either the South African Police or bank investigators, with 31 of these devices seized between January to September 2015, it adds.
The report notes during 2015, the majority of the handheld skimming devices were recovered in Gauteng (15), Western Cape (7) and North West (4). There were no devices recovered in the Free State, KwaZulu-Natal, Limpopo or Northern Cape, it adds.
For the period January to September 2015, a total of 20 ATM mounted skimming devices were recovered by the banking industry and by law enforcement, says Sabric.
Meyer says it is important for merchants, such as restaurant owners, to ensure their employees are not involved in card skimming scams, as the merchant can be held liable if they have not taken due care. "If a consumer goes to a restaurant they expect proper service and their data to be secure."
It is also important for consumers to be proactive and look for signs of card skimming scams, he says.
"If the machine does not work and does not produce a paper slip to prove the transaction failed for some reason (such as failed communication or lack of authorisation), it could be a sign that the machine is a fake."
In this case, consumers should make sure they speak to the manager - the customer has the right to ask the manager if the machine belongs to the establishment, says Meyer.
"It is also a good idea to never let the machine or the card out of sight during transactions."
South African banks are continuously investing in new technology to assist with the detection, prevention and reduction of bankcard fraud, says Sabric.
Crime trends are followed closely and adjustments to monitoring systems are made to mitigate associated risks, it adds. SMS notifications for transactions on card accounts are an effective detection tool and banks encourage customers to utilise this service, says Sabric.
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