South Africans have lost almost R4.5 billion to credit and debit card fraud since 2010, the latest fraud data from Sabric shows. In 2016, gross losses due to credit card fraud increased by 13% to R374.4 million, up from R331.4 million recorded in 2015.

However, this was still significantly down from the R463.3 million lost in 2014. Since 2010, R2.49 billion has been lost to credit card fraud.

In 2016, 48.0% of all credit card gross fraud losses occurred inside South Africa in comparison with the 44.5% in 2015, Sabric said.

“SA-issued credit cards are frequently used by criminals in African countries such as Zimbabwe, Namibia, Botswana, Kenya and Lesotho,” the group said.

“Most of these transactions are fraudulent cash withdrawals at ATM’s. An increase is observed in Mauritius where fraudulent card-not-present (CNP) transactions are reported.

“This emerging trend could relate to the increase in merchants registering their businesses in other countries in order to circumvent rules applicable to South Africa.”

Looking at debit card fraud, in 2016 losses were up only 3.1% from 2015, totalling R343.5 million, versus R333.2 million the year before.

Total debit card fraud over the seven years since 2010 totalled R1.97 billion.



Biggest types of card fraud in South Africa

By far the largest form of credit card fraud in the country is card-not-present (CNP) fraud, which makes up 66.8% of all fraud cases tracked by Sabric, followed by counterfeit cards (26.4%).

For debit cards, most fraud happens on cards that have been lost or stolen (56.2%), followed by counterfeit cards (25.7%) and CNP cases (16.8%).

CNP fraud is a fraudulent transaction where neither the card nor the cardholder is present while conducting transactions – typically when orders for goods placed online or by phone.

Sabric noted that the highest losses from CNP fraud fraud were in respect of tourism and hospitality services including airline tickets, travel agencies, vehicle hire and hotel accommodation as well as direct marketing.

The group noted that many of the CNP transactions are happening at non-South African merchants – probably because systems like 3D-secure are being adopted locally, which deter fraudsters from making purchases at South African online stores.

Most fraudulent non-South African credit card purchases are made in the United States and UK.

Criminals get credit card data from various strategies including phishing, malware and data breaches, Sabric said, and the cases of debit cards being used in similar schemes is set to increase and CNP transactions become more common with that type of card.