Developing economies have highly sophisticated and modern banking infrastructures - and equally sophisticated card fraudsters to match.
This is the view of Candid W"uest, senior threat researcher at Symantec, who says card skimming is not confined to developed economies, and that travellers should be particularly wary when abroad.
He explains that dumps are copies of the information stored on the magnetic stripe of the original card usually contained by electronic skimming devices.
Kalyani Pillay, SA Banking Risk Information Centre (Sabric) CEO, says credit card skimming does occur in SA, and that the increase in counterfeit card fraud trends is a good indicator.
She explains that the skimming of cards is commonly done with handheld skimming devices, usually after the customer has let their card out of sight. She adds that common locations are at restaurants, retail merchants or around ATMs.
“Criminals purchase card readers which are available for legitimate use,” she explains. “They then use these readers to steal banking details from the card.”
W"uest says: “Newer versions even contain a GSM module that will send the encrypted dumps back to the attacker.”
He adds that video footage from surveillance cameras has shown scammers can install the fake keypad and card reader in under five seconds.
“Information obtained from skimmed cards is usually used to manufacture counterfeit cards which are used to commit fraud,” says W"uest.
“The clones can be almost indistinguishable from authentic cards, often including holograms and embossed gold numbers,” he explains. “If the criminals have recorded the PIN codes, the cards can be used at any ATM to withdraw cash.”
Level of abuse
“Counterfeit card fraud was the primary category of card fraud loss in SA for the period of July 2008 to June 2009, with a financial value of R144 million,” says Pillay. She adds that law enforcement and investigators from the banks also retrieved 80 skimming devices during the same period.
When asked whether the number of skimming attempts were set to increase, Pillay said criminals are known to persist with a modus operandi for as long as it is lucrative for them to do so.
“As a result, the extent of increase, or even decrease, of card skimming incidents is partly dependent on the level of awareness of bank clients about this card fraud trend,” she adds.
She says banks are educating their clients about the way in which they can protect their cards from being skimmed, such as not letting their cards out of sight or continuing with transactions on ATMs that are visibly tampered with.
Allen Mahadeo, Absa GM of self-service channel and distribution, says: “Absa has in the past issued numerous warnings via various channels including the media in order to create an increased awareness among its customers regarding ATM crime.”
He states that Absa has also urged customers to register for the NotifyMe service, which automatically sends an SMS to customers when there is any activity on their accounts.
“NotifyMe includes activity such as ATM withdrawals, debit orders and credit card purchases. This can alert people to fraudulent activity as it happens to their account, allowing them to respond appropriately.”
“The familiarity of bank clients with bank scams directed at them is a necessary addition to the banks' own initiatives to curb bank related crimes.”
World Cup warnings
With the upcoming Soccer World Cup, and the influx of foreigners coming to SA, Pillay says Sabric is already creating bank crime awareness among potential visitors to SA through constant engagement with international media.
She highlights that the banking industry has established an inter-bank forum that focuses specifically on the Fifa World Cup bank crime related issues.
“This is done with the understanding that any increase in consumer activity that emanates from busy periods of festivities such as major sporting events, or even Christmas, has the potential of increasing criminals' attempts to commit fraud.”
She concludes that several initiatives have been initiated in this regard, one being the provision of card fraud awareness information to foreigners at strategic ports of entry and tourist hot spots.
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