In the third and final part in the series on bank fraud, credit card and
internet scams come under scrutiny.
Credit card fraud is easier to commit than any other form of bank fraud,
because fraudsters do not need your card or your personal identification
number to go on a spending spree at your expense. All they need is your card
number, which isprinted on your card.
A growing credit card scam, called "skimming", involves the lifting of your
card`s magnetic strip while it is out of your view. These details are then
used to make fraudulent purchases in South Africa and abroad.
About 70 percent of all fraud occurs as a result of lost or stolen cards.
Liability
Claire Gebhardt-Mann, spokesperson for the Banking Council, says you have
the right to dispute any transaction where you did not physically present
your credit card for payment and had to sign.
However, this does not apply when you make purchases over the internet, for
example.
If you find that you have been billed for a purchase that you did not make,
or for goods you did not receive, or goods you received damaged, you can
dispute the transaction within 60 days and your bank will reverse the
transaction.
This is a safeguard that you enjoy under the Association of Bank Card
Issuers` Code of Practice, with which all major banking institutions comply,
Gebhardt-Mann says.
Your bank cannot distinguish between a valid and an invalid transaction, so
your responsibility is to scrutinise your bank statements and write to the
bank, so that the dispute process can be set in motion.
You alone carry the risk where your card is lost or stolen and is used by
somebody else, but you can take out lost card insurance for around R20 a
year. This will cover the gap between noticing your card is stolen and
reporting it.
But remember, lost card protection will not pay out if you were negligent
about keeping your card safe.
Never let your credit card out of your sight. As soon as you are aware that
it has been stolen or lost, report it and make sure you get a reference
number as proof that you did report it, because from then on, the risk is
carried by your bank.
What banks are doing to protect you
To track and eliminate stolen cards from the system, every night when the
transaction records at the shops and organisations that have accepted credit
card payments are uploaded to the bank`s computer, the latest version of the
stolen or "hot card" list is downloaded onto the point of sale machine.
To prevent cards from being stolen in the mail, the banks and the Post
Office have established a task team which investigates any theft or internal
staff involvement. And they have implemented more secure delivery
techniques.
Banks have also built in protection for cards, by setting up computer
systems to monitor your normal shopping behaviour.
If you are generally a careful spender, but then one month you splurge on a
new television set, a new lounge suite and a microwave oven, you can expect
a telephone call from the bank to check whether you really did make these
purchases.
Common credit card scams
* Lost cards: If you lose your card, somebody can find it and use it.
* Theft: One of the biggest sources of credit card theft in the past was
from the mail, but the banks and the post office implemented measures to
take care of this problem. You could also lose money when your credit card
is stolen from you directly, such as when a thief grabs your handbag or
wallet.
* Multiple swipings: Criminals can use your card and swipe it through the
point of sale machine several times. This is usually done to keep the amount
under the floor limit of your card, so that special authorisation is not
needed.
* Split sales: A dishonest merchant may put through your actual purchase,
but on subsequent swipes, fill in fictitious sales and amounts.
* Skimming: This involves criminals using a small device through which they
swipe your card when you present it for payment, say, at a restaurant. The
device captures all the card details, which are stored in the magnetic strip
on the back of the card. This information is then used on counterfeit cards
countrywide.
* Sale of credit card numbers: Syndicates buy credit card numbers from
merchants or dishonest employees at shops or restaurants where you might
recently have made purchases. These lists of credit card numbers can be
accessed internally from point of sale terminals, and syndicates use these
numbers to create counterfeit cards.
GENERAL TIPS
* Sign your card as soon as you receive it with indelible ink;
* Make sure you get your card back after presenting it for payment;
* Do not allow your card to be used out of your sight;
* Rip up any incorrect sales slips;
* Check your statements thoroughly and immediately notify your bank of any
errors or unauthorised charges;
* Do not leave any sales slips or carbon papers that have your credit card
number in the rubbish bin - always rip them up;
* Keep your card in a safe place and make sure you know where it is on a
daily basis;
* Memorise your PIN number and never keep your PIN number and card together
in your wallet or purse;
* Keep a list of all your credit cards and their numbers as well as the lost
card toll- free numbers to call in case you need to report your card lost or
stolen;
* Report it if your card is lost or stolen without delay;
* Buy lost card insurance; and
* When using an ATM, put your card in and press cancel to make sure the ATM
has not been tampered with.
INTERNET SHOPPING TIPS
* Be careful of placing your card number on the Internet. Check the website
to see if a physical address and telephone numbers are given. Remember that
0800 numbers in the United States are not a safeguard because you cannot
dial them from South Africa.
* Check the digital certificate issued to an organisation by double clicking
on the little padlock when you are in a secure website;
* Keep your username and password secret; and
* Do not send your user name and password via e-mail.