2

EXECUTIVE SUMMARY

QUALIFICATION OF INFORMATION

PAYMENTS ASSOCIATION OF SOUTH AFRICA (PASA)

OVERVIEW OF CREDIT CARD FRAUD (2010-2016)

- Credit card fraud distribution

- Credit card gross fraud loss in South Africa

- Geographical distribution of credit card fraud

OVERVIEW OF DEBIT CARD FRAUD (2010-2016)

- Debit card fraud distribution

- Debit card gross fraud loss in South Africa

- Geographical distribution of debit card fraud

CARD FRAUD IN THE UK

ATM CRIME

- Overview of ATM transactions (cash withdrawals) in credit card fraud (2016)

- Overview of ATM transactions (cash withdrawals) in debit card fraud (2016)

BREAKDOWN OF FRAUD TYPES

- Lost andor stolen card fraud

- Not received issued card fraud (NRI)

- False application card fraud

- Counterfeit card fraud

- Account takeover card fraud

- Card not present fraud (CNP)

3

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11

12

14

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17

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20

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22

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28

PG

CONTENTS

3

Cards fraudulently obtained by criminals were used toconduct cash withdrawals at ATMs inside South Africa

3 of these transactions were credit card related and 62 debit card

The banking industryrsquos gross fraud losses due to South African

(SA) issued credit card fraud increased by 13

from R3314m in 2015 to R3744m in 2016

480 of all credit card fraud losses occurred in South Africa

797 of all debit card fraud losses occurred in South Africa

Gross fraud losses due to fraud perpetrated with SA-issued

debit cards increased by 31 from R3332m in 2015 to

R3435m in 2016

Trends per fraud type in respect of credit and debit card fraud are as follows

Fraud Type Credit Card Debit Card

Overall Gross Fraud Loss

Lost andor Stolen

Counterfeit

CNP (Card Not Present)

Provinces mostly affected by card fraud are Gauteng Western Cape and KwaZulu Natal Both credit and debit card fraud losses decreased in the Western Cape

EXECUTIVE SUMMARY

4

Credit and debit card fraud information utilised in this report was provided by African Bank alBaraka Bank Bank of Athens Barclays Africa Group Bidvest Capitec Bank First National Bank Investec Mercantile Bank Nedbank Postbank UBank Sasfin as well as Standard Bank of South Africa

Statistics used in the report cover the period from 01 January to 31 December 2016 For the comparative analysis the above-mentioned period was compared to similar periods since 2010 with a focus on 2015 to 2016

Information set used All credit and debit card gross fraud losses reported to SABRIC by 28 February 2016 (extracted on 8 March 2017) All calculations were based on the date of the fraudulent transaction

All fraud losses mentioned in this booklet refer to gross fraud losses and do not relate to the nett losses suffered by the banking industry Fraud loss figures are rounded to the nearest R1 million unless otherwise stated and therefore the sum of the separate losses (for example per loss categoryfraud typesprovinces) may differ from the rounded loss shown

This publication reflects on a full yearrsquos data and not a nine (9) month period as was the case in previous publications The statistics in the 2016 booklet will therefore not correspond with those depicted in previous booklets

QUALIFICATION OF INFORMATION

5

Card payments constituted 61 of all payment transactions processed in South Africa during 2016 with over 60 million Debit Cards and nearly 8 million Credit Cards in circulation The drive to replace magstripe cards with more secure and improved EMV chip and PIN capable cards continues and over 65 of Debit Cards and more than 90 of Credit Cards are currently chipped

As in other jurisdictions such as the USA Europe and Australia card payments in South Africa continue to be a popular and trusted means of payment but brings with it challenges and opportunities An increase in the number and severity of data breaches worldwide the ongoing quests to devalue card data and continued focus on improving authentication methods are only some of the examples of the challenges being dealt with

Fortunately there is also ample opportunity in the card world and in South Africa specifically there were a number of developments during 2016 The biggest one was a project that facilitated the worldrsquos first truly interoperable biometric specification This specification allows for biometric verification and is now recognised as the third type of Customer Verification Method (CVM) after signature and PIN Biometric authentication is intended to prevent fraud as well as make it easier to pay securely

A second opportunity in the South African market worth mentioning is the increased adoption of contactless technology during 2016 Whilst the regulatory framework to allow contactless transactions has been in place since 2015 the adoption of this technology only started showing significant signs of increase during 2016 With a number of larger merchants embracing the new trend of contactless payments and increased contactless card issuance the conversation around increasing the original contactless transaction limit of R200 has prevailed The fourth quarter saw the decision to increase the limit to R500 and as a result both usage and fraud trends will be monitored closely during 2017

Whilst traditional fraud trends continue to be monitored and addressed a number of technology developments have introduced new non-traditional risks that may need a fresh approach to fraud management Examples of such developments include the use of electronic wallets with the ability to load card information and facilitate payments new authentication methods by non-traditional players ie Applepay Samsungpay and the increased introduction of payment applications involving non-traditional players

Efforts to secure the card payment system continue to receive priority attention These include the adoption and use of 3D Secure for e-commerce transactions and enforcing PCI DSS on System Operators and Level 1 Merchants The formulation of a framework to address data security for smaller merchant categories has also received attention and a final position is expected in 2017 In conclusion we note that the card payment system continues to develop and as we move towards the future with enthusiasm and expectation we also have to remember that our number one priority will also be to ensure the system is safe secure and relevant

Our number one priority is to ensurethe South African payment systemremains safe secure and relevant

ldquordquo

SABRIC would like to acknowledge PASA for their contribution

PAYMENTS ASSOCIATION OF SOUTH AFRICA (PASA)

6

Gross fraud losses due to fraud perpetrated with SA-issued credit cards increased by 130 from R3314m in 2015 compared with R3744m in 2016

The graphs below depict the industryrsquos gross fraud losses on SA-issued credit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued credit cards (all countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued credit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued credit cards during 2016

CNP was the highest

Gross fraud losses due to fraud perpetrated with SA-issued credit cards

increased by 130

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

7

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R262m R173m R107m R89m R107m R116m R158m

NRI (Not Received Issued) R17m R12m ltR1m ltR1m ltR1m ltR1m R31m

False Application Fraud R24m R155m R194m R137m R932m R73m R19m

Counterfeit R972m R1655m R908m R1194m R1169m R990m R990m

Account Takeover ltR1m ltR1m R15m R23m ltR1m R18m R29m

CNP (Card Not Present) R815m R1887m R2138m R2389m R2407m R2104m R2500m

Credit card gross fraud losses on SA-issued credit card (2010 to 2016) inside and outside South Africa All Figures in (R) Millions

Transactions outside South Africa Transactions in South Africa

CREDIT CARD FRAUD DISTRIBUTION

SA-issued credit card gross fraud losses per fraud type all countries All Figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

8

2016 480 of all credit card gross fraud losses occurred inside South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased

by 189

During 2016 480 of all credit card gross fraud losses occurred inside the borders of South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased by 189 (R2104m in 2015 to R2500m in 2016) CNP fraud remained the biggest contributor to gross fraud losses on SA-issued credit cards (668) during 2016 The majority of the losses (651) associated with CNP credit card fraud occurred outside South Africa

Counterfeit credit card fraud accounted for 264 of the gross fraud losses on credit cards These losses remained stable with R990m reported in 2015 and 2016 The majority of losses (711) associated with counterfeit credit card transactions occurred within South Africa Fraudulent spend with lost andor stolen cards increased by 366 with 820 of the transactions occurring in South Africa

SA-issued credit cards are frequently used by criminals in African countries such as Zimbabwe Namibia Botswana Kenya and Lesotho Most of these transactions are fraudulent cash withdrawals at ATMrsquos An increase is observed in Mauritius where fraudulent 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

Five cross border countries with the highest recorded financial losses due to CNP and Counterfeit fraud on SA-issued credit cards during 2016 were

United States R414m United Kingdom

R19m

NetherlandsR59m

Counterfeit

CNP

United Kingdom R334m

CyprusR67m

China R52m

China R12m

Indonesia ltR1m

United States R134m

Canada ltR1m

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

9

SA-issued credit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

CREDIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Credit card gross fraud losses on SA-issued cards used in South Africa increased by 219 from R1475m in 2015 to R1798m in 2016

Lost andor stolen credit card gross fraud losses increased by 235 in 2016 from R105m (2015) to R129m (2016) Lost andor stolen credit card gross fraud losses account for 72 of the total credit card gross fraud losses in South Africa Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to circumvent fraud risk mitigation measures implemented by the banking industry

Transactions associated with false applications decreased by 10 during 2016 with the gross fraud loss decreasing from R61m (2015) to R18m (2016) Measures deployed in 2014 when online application channels were abused and the positive impact of biometric fingerprint verification utilised by the banks have proven to be effective and the fraud loss associated with false applications is currently at the lowest level since 2007

During 2016 increases were observed for NRI (Not Received Issued) and account takeovers Although the losses related to these fraud types are still relatively small cards are attractive to criminals since legitimate cards and PINs are obtained through these modus operandi

Counterfeit credit card gross fraud losses inside South Africa increased by 227 (from R573m in 2015 to R704m in 2016) Counterfeit credit card fraud is the second biggest contributor (392) to the overall gross fraud loss on SA-Issued credit cards used in South Africa Although the overall counterfeit loss figure remained constant from 2015 to 2016 a change was observed in the fraudulent spend pattern The total gross fraud loss for counterfeit was R990m in 2016 Of that 71 (R704m) occurred in 2016 as opposed to 579 (R573m) in 2015

CNP fraud committed within South Africa increased by 233 from R708m in 2015 to R874m in 2016 A total of 486 of the overall gross fraud losses on credit cards used inside South Africa relates to CNP fraud

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

10

GEOGRAPHICAL DISTRIBUTION OF CREDIT CARD FRAUD

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa Gauteng accounts for 572 of the credit card gross fraud losses followed by the Western Cape with 161 and KwaZulu Natal with 127

All provinces showed increases during 2016 with the exception of Western Cape where a decrease of 118 was observed

The biggest increases when comparing 2015 and 2016 occurred in the Eastern Cape (1480 from R35m to R87m) North West (1279 from R13m to R29m) Northern Cape (957 from R132 770 to R259 875) and Free State (899 from R721 111 to R14m)

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa

All provinces showed increases except

Western Cape with a decrease of 118

Provincial geographical distribution of credit card gross fraud losses All Figures in (R) Millions

Provincial geographical distribution during 2016

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R16m R24m R34m R26m R21m R35m R87m

Free State R14m ltR1m R12m ltR1m ltR1m ltR1m R14m

Gauteng R615 R1059m R787m R656m R949m R756m R931m

KwaZulu Natal R179m R102m R89m R94m R121m R121m R206m

Limpopo R22m R27m R23m R20m R38m R31m R39m

Mpumalanga R21m R15m R19m R21m R26m R37m R57m

Northern Cape ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

North West R16m R21m R17m R22m R19m R13m R29m

Western Cape R154m R458m R407m R328m R397m R297m R262m

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

11

Gross fraud losses due to fraud perpetrated with SA-issued debit cards increased slightly by 31 from R3332m in 2015 to R3435m in 2016

The graph below depicts the industryrsquos total gross fraud losses on SA-issued debit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued debit cards (All countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued debit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued debit cards during 2016

lostampstolen was the highest

Gross fraud losses due to fraud perpetrated with SA-issued debit cards

increased by 31

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

12

SA-issued debit card gross fraud losses per fraud type all countries All figures in (R) Millions

Debit card gross fraud losses on SA-issued debit cards (2010 to 2016) inside and outside South Africa All figures in (R) Millions

DEBIT CARD FRAUD DISTRIBUTION

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R142m R165m R210m R560m R1062m R1388m R1930m

NRI (Not Received Issued) ltR1m ltR1m ltR1m ltR1m ltR1m R11m R17m

False Application Fraud ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

Counterfeit R2024m R3645m R2869m R2114m R1558m R1360m R884m

Account Takeover ltR1m ltR1m ltR1m ltR1m ltR1m R16m R24m

CNP (Card Not Present) R77m R198m R286m R465m R615m R551m R576m

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Transactions in South Africa Transactions outside South Africa

WiseUpWatchOut

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

3

Cards fraudulently obtained by criminals were used toconduct cash withdrawals at ATMs inside South Africa

3 of these transactions were credit card related and 62 debit card

The banking industryrsquos gross fraud losses due to South African

(SA) issued credit card fraud increased by 13

from R3314m in 2015 to R3744m in 2016

480 of all credit card fraud losses occurred in South Africa

797 of all debit card fraud losses occurred in South Africa

Gross fraud losses due to fraud perpetrated with SA-issued

debit cards increased by 31 from R3332m in 2015 to

R3435m in 2016

Trends per fraud type in respect of credit and debit card fraud are as follows

Fraud Type Credit Card Debit Card

Overall Gross Fraud Loss

Lost andor Stolen

Counterfeit

CNP (Card Not Present)

Provinces mostly affected by card fraud are Gauteng Western Cape and KwaZulu Natal Both credit and debit card fraud losses decreased in the Western Cape

EXECUTIVE SUMMARY

4

Credit and debit card fraud information utilised in this report was provided by African Bank alBaraka Bank Bank of Athens Barclays Africa Group Bidvest Capitec Bank First National Bank Investec Mercantile Bank Nedbank Postbank UBank Sasfin as well as Standard Bank of South Africa

Statistics used in the report cover the period from 01 January to 31 December 2016 For the comparative analysis the above-mentioned period was compared to similar periods since 2010 with a focus on 2015 to 2016

Information set used All credit and debit card gross fraud losses reported to SABRIC by 28 February 2016 (extracted on 8 March 2017) All calculations were based on the date of the fraudulent transaction

All fraud losses mentioned in this booklet refer to gross fraud losses and do not relate to the nett losses suffered by the banking industry Fraud loss figures are rounded to the nearest R1 million unless otherwise stated and therefore the sum of the separate losses (for example per loss categoryfraud typesprovinces) may differ from the rounded loss shown

This publication reflects on a full yearrsquos data and not a nine (9) month period as was the case in previous publications The statistics in the 2016 booklet will therefore not correspond with those depicted in previous booklets

QUALIFICATION OF INFORMATION

5

Card payments constituted 61 of all payment transactions processed in South Africa during 2016 with over 60 million Debit Cards and nearly 8 million Credit Cards in circulation The drive to replace magstripe cards with more secure and improved EMV chip and PIN capable cards continues and over 65 of Debit Cards and more than 90 of Credit Cards are currently chipped

As in other jurisdictions such as the USA Europe and Australia card payments in South Africa continue to be a popular and trusted means of payment but brings with it challenges and opportunities An increase in the number and severity of data breaches worldwide the ongoing quests to devalue card data and continued focus on improving authentication methods are only some of the examples of the challenges being dealt with

Fortunately there is also ample opportunity in the card world and in South Africa specifically there were a number of developments during 2016 The biggest one was a project that facilitated the worldrsquos first truly interoperable biometric specification This specification allows for biometric verification and is now recognised as the third type of Customer Verification Method (CVM) after signature and PIN Biometric authentication is intended to prevent fraud as well as make it easier to pay securely

A second opportunity in the South African market worth mentioning is the increased adoption of contactless technology during 2016 Whilst the regulatory framework to allow contactless transactions has been in place since 2015 the adoption of this technology only started showing significant signs of increase during 2016 With a number of larger merchants embracing the new trend of contactless payments and increased contactless card issuance the conversation around increasing the original contactless transaction limit of R200 has prevailed The fourth quarter saw the decision to increase the limit to R500 and as a result both usage and fraud trends will be monitored closely during 2017

Whilst traditional fraud trends continue to be monitored and addressed a number of technology developments have introduced new non-traditional risks that may need a fresh approach to fraud management Examples of such developments include the use of electronic wallets with the ability to load card information and facilitate payments new authentication methods by non-traditional players ie Applepay Samsungpay and the increased introduction of payment applications involving non-traditional players

Efforts to secure the card payment system continue to receive priority attention These include the adoption and use of 3D Secure for e-commerce transactions and enforcing PCI DSS on System Operators and Level 1 Merchants The formulation of a framework to address data security for smaller merchant categories has also received attention and a final position is expected in 2017 In conclusion we note that the card payment system continues to develop and as we move towards the future with enthusiasm and expectation we also have to remember that our number one priority will also be to ensure the system is safe secure and relevant

Our number one priority is to ensurethe South African payment systemremains safe secure and relevant

ldquordquo

SABRIC would like to acknowledge PASA for their contribution

PAYMENTS ASSOCIATION OF SOUTH AFRICA (PASA)

6

Gross fraud losses due to fraud perpetrated with SA-issued credit cards increased by 130 from R3314m in 2015 compared with R3744m in 2016

The graphs below depict the industryrsquos gross fraud losses on SA-issued credit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued credit cards (all countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued credit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued credit cards during 2016

CNP was the highest

Gross fraud losses due to fraud perpetrated with SA-issued credit cards

increased by 130

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

7

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R262m R173m R107m R89m R107m R116m R158m

NRI (Not Received Issued) R17m R12m ltR1m ltR1m ltR1m ltR1m R31m

False Application Fraud R24m R155m R194m R137m R932m R73m R19m

Counterfeit R972m R1655m R908m R1194m R1169m R990m R990m

Account Takeover ltR1m ltR1m R15m R23m ltR1m R18m R29m

CNP (Card Not Present) R815m R1887m R2138m R2389m R2407m R2104m R2500m

Credit card gross fraud losses on SA-issued credit card (2010 to 2016) inside and outside South Africa All Figures in (R) Millions

Transactions outside South Africa Transactions in South Africa

CREDIT CARD FRAUD DISTRIBUTION

SA-issued credit card gross fraud losses per fraud type all countries All Figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

8

2016 480 of all credit card gross fraud losses occurred inside South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased

by 189

During 2016 480 of all credit card gross fraud losses occurred inside the borders of South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased by 189 (R2104m in 2015 to R2500m in 2016) CNP fraud remained the biggest contributor to gross fraud losses on SA-issued credit cards (668) during 2016 The majority of the losses (651) associated with CNP credit card fraud occurred outside South Africa

Counterfeit credit card fraud accounted for 264 of the gross fraud losses on credit cards These losses remained stable with R990m reported in 2015 and 2016 The majority of losses (711) associated with counterfeit credit card transactions occurred within South Africa Fraudulent spend with lost andor stolen cards increased by 366 with 820 of the transactions occurring in South Africa

SA-issued credit cards are frequently used by criminals in African countries such as Zimbabwe Namibia Botswana Kenya and Lesotho Most of these transactions are fraudulent cash withdrawals at ATMrsquos An increase is observed in Mauritius where fraudulent 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

Five cross border countries with the highest recorded financial losses due to CNP and Counterfeit fraud on SA-issued credit cards during 2016 were

United States R414m United Kingdom

R19m

NetherlandsR59m

Counterfeit

CNP

United Kingdom R334m

CyprusR67m

China R52m

China R12m

Indonesia ltR1m

United States R134m

Canada ltR1m

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

9

SA-issued credit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

CREDIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Credit card gross fraud losses on SA-issued cards used in South Africa increased by 219 from R1475m in 2015 to R1798m in 2016

Lost andor stolen credit card gross fraud losses increased by 235 in 2016 from R105m (2015) to R129m (2016) Lost andor stolen credit card gross fraud losses account for 72 of the total credit card gross fraud losses in South Africa Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to circumvent fraud risk mitigation measures implemented by the banking industry

Transactions associated with false applications decreased by 10 during 2016 with the gross fraud loss decreasing from R61m (2015) to R18m (2016) Measures deployed in 2014 when online application channels were abused and the positive impact of biometric fingerprint verification utilised by the banks have proven to be effective and the fraud loss associated with false applications is currently at the lowest level since 2007

During 2016 increases were observed for NRI (Not Received Issued) and account takeovers Although the losses related to these fraud types are still relatively small cards are attractive to criminals since legitimate cards and PINs are obtained through these modus operandi

Counterfeit credit card gross fraud losses inside South Africa increased by 227 (from R573m in 2015 to R704m in 2016) Counterfeit credit card fraud is the second biggest contributor (392) to the overall gross fraud loss on SA-Issued credit cards used in South Africa Although the overall counterfeit loss figure remained constant from 2015 to 2016 a change was observed in the fraudulent spend pattern The total gross fraud loss for counterfeit was R990m in 2016 Of that 71 (R704m) occurred in 2016 as opposed to 579 (R573m) in 2015

CNP fraud committed within South Africa increased by 233 from R708m in 2015 to R874m in 2016 A total of 486 of the overall gross fraud losses on credit cards used inside South Africa relates to CNP fraud

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

10

GEOGRAPHICAL DISTRIBUTION OF CREDIT CARD FRAUD

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa Gauteng accounts for 572 of the credit card gross fraud losses followed by the Western Cape with 161 and KwaZulu Natal with 127

All provinces showed increases during 2016 with the exception of Western Cape where a decrease of 118 was observed

The biggest increases when comparing 2015 and 2016 occurred in the Eastern Cape (1480 from R35m to R87m) North West (1279 from R13m to R29m) Northern Cape (957 from R132 770 to R259 875) and Free State (899 from R721 111 to R14m)

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa

All provinces showed increases except

Western Cape with a decrease of 118

Provincial geographical distribution of credit card gross fraud losses All Figures in (R) Millions

Provincial geographical distribution during 2016

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R16m R24m R34m R26m R21m R35m R87m

Free State R14m ltR1m R12m ltR1m ltR1m ltR1m R14m

Gauteng R615 R1059m R787m R656m R949m R756m R931m

KwaZulu Natal R179m R102m R89m R94m R121m R121m R206m

Limpopo R22m R27m R23m R20m R38m R31m R39m

Mpumalanga R21m R15m R19m R21m R26m R37m R57m

Northern Cape ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

North West R16m R21m R17m R22m R19m R13m R29m

Western Cape R154m R458m R407m R328m R397m R297m R262m

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

11

Gross fraud losses due to fraud perpetrated with SA-issued debit cards increased slightly by 31 from R3332m in 2015 to R3435m in 2016

The graph below depicts the industryrsquos total gross fraud losses on SA-issued debit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued debit cards (All countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued debit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued debit cards during 2016

lostampstolen was the highest

Gross fraud losses due to fraud perpetrated with SA-issued debit cards

increased by 31

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

12

SA-issued debit card gross fraud losses per fraud type all countries All figures in (R) Millions

Debit card gross fraud losses on SA-issued debit cards (2010 to 2016) inside and outside South Africa All figures in (R) Millions

DEBIT CARD FRAUD DISTRIBUTION

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R142m R165m R210m R560m R1062m R1388m R1930m

NRI (Not Received Issued) ltR1m ltR1m ltR1m ltR1m ltR1m R11m R17m

False Application Fraud ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

Counterfeit R2024m R3645m R2869m R2114m R1558m R1360m R884m

Account Takeover ltR1m ltR1m ltR1m ltR1m ltR1m R16m R24m

CNP (Card Not Present) R77m R198m R286m R465m R615m R551m R576m

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Transactions in South Africa Transactions outside South Africa

WiseUpWatchOut

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

4

Credit and debit card fraud information utilised in this report was provided by African Bank alBaraka Bank Bank of Athens Barclays Africa Group Bidvest Capitec Bank First National Bank Investec Mercantile Bank Nedbank Postbank UBank Sasfin as well as Standard Bank of South Africa

Statistics used in the report cover the period from 01 January to 31 December 2016 For the comparative analysis the above-mentioned period was compared to similar periods since 2010 with a focus on 2015 to 2016

Information set used All credit and debit card gross fraud losses reported to SABRIC by 28 February 2016 (extracted on 8 March 2017) All calculations were based on the date of the fraudulent transaction

All fraud losses mentioned in this booklet refer to gross fraud losses and do not relate to the nett losses suffered by the banking industry Fraud loss figures are rounded to the nearest R1 million unless otherwise stated and therefore the sum of the separate losses (for example per loss categoryfraud typesprovinces) may differ from the rounded loss shown

This publication reflects on a full yearrsquos data and not a nine (9) month period as was the case in previous publications The statistics in the 2016 booklet will therefore not correspond with those depicted in previous booklets

QUALIFICATION OF INFORMATION

5

Card payments constituted 61 of all payment transactions processed in South Africa during 2016 with over 60 million Debit Cards and nearly 8 million Credit Cards in circulation The drive to replace magstripe cards with more secure and improved EMV chip and PIN capable cards continues and over 65 of Debit Cards and more than 90 of Credit Cards are currently chipped

As in other jurisdictions such as the USA Europe and Australia card payments in South Africa continue to be a popular and trusted means of payment but brings with it challenges and opportunities An increase in the number and severity of data breaches worldwide the ongoing quests to devalue card data and continued focus on improving authentication methods are only some of the examples of the challenges being dealt with

Fortunately there is also ample opportunity in the card world and in South Africa specifically there were a number of developments during 2016 The biggest one was a project that facilitated the worldrsquos first truly interoperable biometric specification This specification allows for biometric verification and is now recognised as the third type of Customer Verification Method (CVM) after signature and PIN Biometric authentication is intended to prevent fraud as well as make it easier to pay securely

A second opportunity in the South African market worth mentioning is the increased adoption of contactless technology during 2016 Whilst the regulatory framework to allow contactless transactions has been in place since 2015 the adoption of this technology only started showing significant signs of increase during 2016 With a number of larger merchants embracing the new trend of contactless payments and increased contactless card issuance the conversation around increasing the original contactless transaction limit of R200 has prevailed The fourth quarter saw the decision to increase the limit to R500 and as a result both usage and fraud trends will be monitored closely during 2017

Whilst traditional fraud trends continue to be monitored and addressed a number of technology developments have introduced new non-traditional risks that may need a fresh approach to fraud management Examples of such developments include the use of electronic wallets with the ability to load card information and facilitate payments new authentication methods by non-traditional players ie Applepay Samsungpay and the increased introduction of payment applications involving non-traditional players

Efforts to secure the card payment system continue to receive priority attention These include the adoption and use of 3D Secure for e-commerce transactions and enforcing PCI DSS on System Operators and Level 1 Merchants The formulation of a framework to address data security for smaller merchant categories has also received attention and a final position is expected in 2017 In conclusion we note that the card payment system continues to develop and as we move towards the future with enthusiasm and expectation we also have to remember that our number one priority will also be to ensure the system is safe secure and relevant

Our number one priority is to ensurethe South African payment systemremains safe secure and relevant

ldquordquo

SABRIC would like to acknowledge PASA for their contribution

PAYMENTS ASSOCIATION OF SOUTH AFRICA (PASA)

6

Gross fraud losses due to fraud perpetrated with SA-issued credit cards increased by 130 from R3314m in 2015 compared with R3744m in 2016

The graphs below depict the industryrsquos gross fraud losses on SA-issued credit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued credit cards (all countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued credit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued credit cards during 2016

CNP was the highest

Gross fraud losses due to fraud perpetrated with SA-issued credit cards

increased by 130

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

7

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R262m R173m R107m R89m R107m R116m R158m

NRI (Not Received Issued) R17m R12m ltR1m ltR1m ltR1m ltR1m R31m

False Application Fraud R24m R155m R194m R137m R932m R73m R19m

Counterfeit R972m R1655m R908m R1194m R1169m R990m R990m

Account Takeover ltR1m ltR1m R15m R23m ltR1m R18m R29m

CNP (Card Not Present) R815m R1887m R2138m R2389m R2407m R2104m R2500m

Credit card gross fraud losses on SA-issued credit card (2010 to 2016) inside and outside South Africa All Figures in (R) Millions

Transactions outside South Africa Transactions in South Africa

CREDIT CARD FRAUD DISTRIBUTION

SA-issued credit card gross fraud losses per fraud type all countries All Figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

8

2016 480 of all credit card gross fraud losses occurred inside South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased

by 189

During 2016 480 of all credit card gross fraud losses occurred inside the borders of South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased by 189 (R2104m in 2015 to R2500m in 2016) CNP fraud remained the biggest contributor to gross fraud losses on SA-issued credit cards (668) during 2016 The majority of the losses (651) associated with CNP credit card fraud occurred outside South Africa

Counterfeit credit card fraud accounted for 264 of the gross fraud losses on credit cards These losses remained stable with R990m reported in 2015 and 2016 The majority of losses (711) associated with counterfeit credit card transactions occurred within South Africa Fraudulent spend with lost andor stolen cards increased by 366 with 820 of the transactions occurring in South Africa

SA-issued credit cards are frequently used by criminals in African countries such as Zimbabwe Namibia Botswana Kenya and Lesotho Most of these transactions are fraudulent cash withdrawals at ATMrsquos An increase is observed in Mauritius where fraudulent 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

Five cross border countries with the highest recorded financial losses due to CNP and Counterfeit fraud on SA-issued credit cards during 2016 were

United States R414m United Kingdom

R19m

NetherlandsR59m

Counterfeit

CNP

United Kingdom R334m

CyprusR67m

China R52m

China R12m

Indonesia ltR1m

United States R134m

Canada ltR1m

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

9

SA-issued credit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

CREDIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Credit card gross fraud losses on SA-issued cards used in South Africa increased by 219 from R1475m in 2015 to R1798m in 2016

Lost andor stolen credit card gross fraud losses increased by 235 in 2016 from R105m (2015) to R129m (2016) Lost andor stolen credit card gross fraud losses account for 72 of the total credit card gross fraud losses in South Africa Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to circumvent fraud risk mitigation measures implemented by the banking industry

Transactions associated with false applications decreased by 10 during 2016 with the gross fraud loss decreasing from R61m (2015) to R18m (2016) Measures deployed in 2014 when online application channels were abused and the positive impact of biometric fingerprint verification utilised by the banks have proven to be effective and the fraud loss associated with false applications is currently at the lowest level since 2007

During 2016 increases were observed for NRI (Not Received Issued) and account takeovers Although the losses related to these fraud types are still relatively small cards are attractive to criminals since legitimate cards and PINs are obtained through these modus operandi

Counterfeit credit card gross fraud losses inside South Africa increased by 227 (from R573m in 2015 to R704m in 2016) Counterfeit credit card fraud is the second biggest contributor (392) to the overall gross fraud loss on SA-Issued credit cards used in South Africa Although the overall counterfeit loss figure remained constant from 2015 to 2016 a change was observed in the fraudulent spend pattern The total gross fraud loss for counterfeit was R990m in 2016 Of that 71 (R704m) occurred in 2016 as opposed to 579 (R573m) in 2015

CNP fraud committed within South Africa increased by 233 from R708m in 2015 to R874m in 2016 A total of 486 of the overall gross fraud losses on credit cards used inside South Africa relates to CNP fraud

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0

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2016201520142013201220112010

3654

3409

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4504

479

5675

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20162015201420132012201120100

5

10

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20

25

30

2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

10

GEOGRAPHICAL DISTRIBUTION OF CREDIT CARD FRAUD

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa Gauteng accounts for 572 of the credit card gross fraud losses followed by the Western Cape with 161 and KwaZulu Natal with 127

All provinces showed increases during 2016 with the exception of Western Cape where a decrease of 118 was observed

The biggest increases when comparing 2015 and 2016 occurred in the Eastern Cape (1480 from R35m to R87m) North West (1279 from R13m to R29m) Northern Cape (957 from R132 770 to R259 875) and Free State (899 from R721 111 to R14m)

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa

All provinces showed increases except

Western Cape with a decrease of 118

Provincial geographical distribution of credit card gross fraud losses All Figures in (R) Millions

Provincial geographical distribution during 2016

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R16m R24m R34m R26m R21m R35m R87m

Free State R14m ltR1m R12m ltR1m ltR1m ltR1m R14m

Gauteng R615 R1059m R787m R656m R949m R756m R931m

KwaZulu Natal R179m R102m R89m R94m R121m R121m R206m

Limpopo R22m R27m R23m R20m R38m R31m R39m

Mpumalanga R21m R15m R19m R21m R26m R37m R57m

Northern Cape ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

North West R16m R21m R17m R22m R19m R13m R29m

Western Cape R154m R458m R407m R328m R397m R297m R262m

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

11

Gross fraud losses due to fraud perpetrated with SA-issued debit cards increased slightly by 31 from R3332m in 2015 to R3435m in 2016

The graph below depicts the industryrsquos total gross fraud losses on SA-issued debit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued debit cards (All countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued debit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

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02

0

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20162015201420132012201120100

40

80

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160

200

240

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320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

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200

250

2016201520142013201220112010

0

50

100

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400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

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2014

2013

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2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued debit cards during 2016

lostampstolen was the highest

Gross fraud losses due to fraud perpetrated with SA-issued debit cards

increased by 31

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

12

SA-issued debit card gross fraud losses per fraud type all countries All figures in (R) Millions

Debit card gross fraud losses on SA-issued debit cards (2010 to 2016) inside and outside South Africa All figures in (R) Millions

DEBIT CARD FRAUD DISTRIBUTION

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R142m R165m R210m R560m R1062m R1388m R1930m

NRI (Not Received Issued) ltR1m ltR1m ltR1m ltR1m ltR1m R11m R17m

False Application Fraud ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

Counterfeit R2024m R3645m R2869m R2114m R1558m R1360m R884m

Account Takeover ltR1m ltR1m ltR1m ltR1m ltR1m R16m R24m

CNP (Card Not Present) R77m R198m R286m R465m R615m R551m R576m

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

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180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Transactions in South Africa Transactions outside South Africa

WiseUpWatchOut

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

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20162015201420132012201120100

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2016201520142013201220112010

0 100 200 300 400 500 600

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0

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2016201520142013201220112010

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2016201520142013201220112010

3654

3409

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4504

479

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20162015201420132012201120100

5

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2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

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3654

3409

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4504

479

5675

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20162015201420132012201120100

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30

2016201520142013201220112010

Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

5

Card payments constituted 61 of all payment transactions processed in South Africa during 2016 with over 60 million Debit Cards and nearly 8 million Credit Cards in circulation The drive to replace magstripe cards with more secure and improved EMV chip and PIN capable cards continues and over 65 of Debit Cards and more than 90 of Credit Cards are currently chipped

As in other jurisdictions such as the USA Europe and Australia card payments in South Africa continue to be a popular and trusted means of payment but brings with it challenges and opportunities An increase in the number and severity of data breaches worldwide the ongoing quests to devalue card data and continued focus on improving authentication methods are only some of the examples of the challenges being dealt with

Fortunately there is also ample opportunity in the card world and in South Africa specifically there were a number of developments during 2016 The biggest one was a project that facilitated the worldrsquos first truly interoperable biometric specification This specification allows for biometric verification and is now recognised as the third type of Customer Verification Method (CVM) after signature and PIN Biometric authentication is intended to prevent fraud as well as make it easier to pay securely

A second opportunity in the South African market worth mentioning is the increased adoption of contactless technology during 2016 Whilst the regulatory framework to allow contactless transactions has been in place since 2015 the adoption of this technology only started showing significant signs of increase during 2016 With a number of larger merchants embracing the new trend of contactless payments and increased contactless card issuance the conversation around increasing the original contactless transaction limit of R200 has prevailed The fourth quarter saw the decision to increase the limit to R500 and as a result both usage and fraud trends will be monitored closely during 2017

Whilst traditional fraud trends continue to be monitored and addressed a number of technology developments have introduced new non-traditional risks that may need a fresh approach to fraud management Examples of such developments include the use of electronic wallets with the ability to load card information and facilitate payments new authentication methods by non-traditional players ie Applepay Samsungpay and the increased introduction of payment applications involving non-traditional players

Efforts to secure the card payment system continue to receive priority attention These include the adoption and use of 3D Secure for e-commerce transactions and enforcing PCI DSS on System Operators and Level 1 Merchants The formulation of a framework to address data security for smaller merchant categories has also received attention and a final position is expected in 2017 In conclusion we note that the card payment system continues to develop and as we move towards the future with enthusiasm and expectation we also have to remember that our number one priority will also be to ensure the system is safe secure and relevant

Our number one priority is to ensurethe South African payment systemremains safe secure and relevant

ldquordquo

SABRIC would like to acknowledge PASA for their contribution

PAYMENTS ASSOCIATION OF SOUTH AFRICA (PASA)

6

Gross fraud losses due to fraud perpetrated with SA-issued credit cards increased by 130 from R3314m in 2015 compared with R3744m in 2016

The graphs below depict the industryrsquos gross fraud losses on SA-issued credit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued credit cards (all countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued credit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued credit cards during 2016

CNP was the highest

Gross fraud losses due to fraud perpetrated with SA-issued credit cards

increased by 130

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

7

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R262m R173m R107m R89m R107m R116m R158m

NRI (Not Received Issued) R17m R12m ltR1m ltR1m ltR1m ltR1m R31m

False Application Fraud R24m R155m R194m R137m R932m R73m R19m

Counterfeit R972m R1655m R908m R1194m R1169m R990m R990m

Account Takeover ltR1m ltR1m R15m R23m ltR1m R18m R29m

CNP (Card Not Present) R815m R1887m R2138m R2389m R2407m R2104m R2500m

Credit card gross fraud losses on SA-issued credit card (2010 to 2016) inside and outside South Africa All Figures in (R) Millions

Transactions outside South Africa Transactions in South Africa

CREDIT CARD FRAUD DISTRIBUTION

SA-issued credit card gross fraud losses per fraud type all countries All Figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

8

2016 480 of all credit card gross fraud losses occurred inside South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased

by 189

During 2016 480 of all credit card gross fraud losses occurred inside the borders of South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased by 189 (R2104m in 2015 to R2500m in 2016) CNP fraud remained the biggest contributor to gross fraud losses on SA-issued credit cards (668) during 2016 The majority of the losses (651) associated with CNP credit card fraud occurred outside South Africa

Counterfeit credit card fraud accounted for 264 of the gross fraud losses on credit cards These losses remained stable with R990m reported in 2015 and 2016 The majority of losses (711) associated with counterfeit credit card transactions occurred within South Africa Fraudulent spend with lost andor stolen cards increased by 366 with 820 of the transactions occurring in South Africa

SA-issued credit cards are frequently used by criminals in African countries such as Zimbabwe Namibia Botswana Kenya and Lesotho Most of these transactions are fraudulent cash withdrawals at ATMrsquos An increase is observed in Mauritius where fraudulent 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

Five cross border countries with the highest recorded financial losses due to CNP and Counterfeit fraud on SA-issued credit cards during 2016 were

United States R414m United Kingdom

R19m

NetherlandsR59m

Counterfeit

CNP

United Kingdom R334m

CyprusR67m

China R52m

China R12m

Indonesia ltR1m

United States R134m

Canada ltR1m

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

9

SA-issued credit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

CREDIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Credit card gross fraud losses on SA-issued cards used in South Africa increased by 219 from R1475m in 2015 to R1798m in 2016

Lost andor stolen credit card gross fraud losses increased by 235 in 2016 from R105m (2015) to R129m (2016) Lost andor stolen credit card gross fraud losses account for 72 of the total credit card gross fraud losses in South Africa Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to circumvent fraud risk mitigation measures implemented by the banking industry

Transactions associated with false applications decreased by 10 during 2016 with the gross fraud loss decreasing from R61m (2015) to R18m (2016) Measures deployed in 2014 when online application channels were abused and the positive impact of biometric fingerprint verification utilised by the banks have proven to be effective and the fraud loss associated with false applications is currently at the lowest level since 2007

During 2016 increases were observed for NRI (Not Received Issued) and account takeovers Although the losses related to these fraud types are still relatively small cards are attractive to criminals since legitimate cards and PINs are obtained through these modus operandi

Counterfeit credit card gross fraud losses inside South Africa increased by 227 (from R573m in 2015 to R704m in 2016) Counterfeit credit card fraud is the second biggest contributor (392) to the overall gross fraud loss on SA-Issued credit cards used in South Africa Although the overall counterfeit loss figure remained constant from 2015 to 2016 a change was observed in the fraudulent spend pattern The total gross fraud loss for counterfeit was R990m in 2016 Of that 71 (R704m) occurred in 2016 as opposed to 579 (R573m) in 2015

CNP fraud committed within South Africa increased by 233 from R708m in 2015 to R874m in 2016 A total of 486 of the overall gross fraud losses on credit cards used inside South Africa relates to CNP fraud

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

10

GEOGRAPHICAL DISTRIBUTION OF CREDIT CARD FRAUD

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa Gauteng accounts for 572 of the credit card gross fraud losses followed by the Western Cape with 161 and KwaZulu Natal with 127

All provinces showed increases during 2016 with the exception of Western Cape where a decrease of 118 was observed

The biggest increases when comparing 2015 and 2016 occurred in the Eastern Cape (1480 from R35m to R87m) North West (1279 from R13m to R29m) Northern Cape (957 from R132 770 to R259 875) and Free State (899 from R721 111 to R14m)

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa

All provinces showed increases except

Western Cape with a decrease of 118

Provincial geographical distribution of credit card gross fraud losses All Figures in (R) Millions

Provincial geographical distribution during 2016

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R16m R24m R34m R26m R21m R35m R87m

Free State R14m ltR1m R12m ltR1m ltR1m ltR1m R14m

Gauteng R615 R1059m R787m R656m R949m R756m R931m

KwaZulu Natal R179m R102m R89m R94m R121m R121m R206m

Limpopo R22m R27m R23m R20m R38m R31m R39m

Mpumalanga R21m R15m R19m R21m R26m R37m R57m

Northern Cape ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

North West R16m R21m R17m R22m R19m R13m R29m

Western Cape R154m R458m R407m R328m R397m R297m R262m

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

11

Gross fraud losses due to fraud perpetrated with SA-issued debit cards increased slightly by 31 from R3332m in 2015 to R3435m in 2016

The graph below depicts the industryrsquos total gross fraud losses on SA-issued debit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued debit cards (All countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued debit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued debit cards during 2016

lostampstolen was the highest

Gross fraud losses due to fraud perpetrated with SA-issued debit cards

increased by 31

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

12

SA-issued debit card gross fraud losses per fraud type all countries All figures in (R) Millions

Debit card gross fraud losses on SA-issued debit cards (2010 to 2016) inside and outside South Africa All figures in (R) Millions

DEBIT CARD FRAUD DISTRIBUTION

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R142m R165m R210m R560m R1062m R1388m R1930m

NRI (Not Received Issued) ltR1m ltR1m ltR1m ltR1m ltR1m R11m R17m

False Application Fraud ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

Counterfeit R2024m R3645m R2869m R2114m R1558m R1360m R884m

Account Takeover ltR1m ltR1m ltR1m ltR1m ltR1m R16m R24m

CNP (Card Not Present) R77m R198m R286m R465m R615m R551m R576m

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Transactions in South Africa Transactions outside South Africa

WiseUpWatchOut

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

0

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40

60

80

100

120

140

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200

20162015201420132012201120100

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2016201520142013201220112010

0 100 200 300 400 500 600

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3654

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4504

479

5675

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20162015201420132012201120100

5

10

15

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25

30

2016201520142013201220112010

Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

6

Gross fraud losses due to fraud perpetrated with SA-issued credit cards increased by 130 from R3314m in 2015 compared with R3744m in 2016

The graphs below depict the industryrsquos gross fraud losses on SA-issued credit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued credit cards (all countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued credit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

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200

20162015201420132012201120100

40

80

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160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

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350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

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2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued credit cards during 2016

CNP was the highest

Gross fraud losses due to fraud perpetrated with SA-issued credit cards

increased by 130

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

7

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R262m R173m R107m R89m R107m R116m R158m

NRI (Not Received Issued) R17m R12m ltR1m ltR1m ltR1m ltR1m R31m

False Application Fraud R24m R155m R194m R137m R932m R73m R19m

Counterfeit R972m R1655m R908m R1194m R1169m R990m R990m

Account Takeover ltR1m ltR1m R15m R23m ltR1m R18m R29m

CNP (Card Not Present) R815m R1887m R2138m R2389m R2407m R2104m R2500m

Credit card gross fraud losses on SA-issued credit card (2010 to 2016) inside and outside South Africa All Figures in (R) Millions

Transactions outside South Africa Transactions in South Africa

CREDIT CARD FRAUD DISTRIBUTION

SA-issued credit card gross fraud losses per fraud type all countries All Figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

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20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

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400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

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0 5 10 15 20 25 30

2016

2015

2014

2013

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2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

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2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

8

2016 480 of all credit card gross fraud losses occurred inside South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased

by 189

During 2016 480 of all credit card gross fraud losses occurred inside the borders of South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased by 189 (R2104m in 2015 to R2500m in 2016) CNP fraud remained the biggest contributor to gross fraud losses on SA-issued credit cards (668) during 2016 The majority of the losses (651) associated with CNP credit card fraud occurred outside South Africa

Counterfeit credit card fraud accounted for 264 of the gross fraud losses on credit cards These losses remained stable with R990m reported in 2015 and 2016 The majority of losses (711) associated with counterfeit credit card transactions occurred within South Africa Fraudulent spend with lost andor stolen cards increased by 366 with 820 of the transactions occurring in South Africa

SA-issued credit cards are frequently used by criminals in African countries such as Zimbabwe Namibia Botswana Kenya and Lesotho Most of these transactions are fraudulent cash withdrawals at ATMrsquos An increase is observed in Mauritius where fraudulent 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

Five cross border countries with the highest recorded financial losses due to CNP and Counterfeit fraud on SA-issued credit cards during 2016 were

United States R414m United Kingdom

R19m

NetherlandsR59m

Counterfeit

CNP

United Kingdom R334m

CyprusR67m

China R52m

China R12m

Indonesia ltR1m

United States R134m

Canada ltR1m

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

9

SA-issued credit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

CREDIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Credit card gross fraud losses on SA-issued cards used in South Africa increased by 219 from R1475m in 2015 to R1798m in 2016

Lost andor stolen credit card gross fraud losses increased by 235 in 2016 from R105m (2015) to R129m (2016) Lost andor stolen credit card gross fraud losses account for 72 of the total credit card gross fraud losses in South Africa Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to circumvent fraud risk mitigation measures implemented by the banking industry

Transactions associated with false applications decreased by 10 during 2016 with the gross fraud loss decreasing from R61m (2015) to R18m (2016) Measures deployed in 2014 when online application channels were abused and the positive impact of biometric fingerprint verification utilised by the banks have proven to be effective and the fraud loss associated with false applications is currently at the lowest level since 2007

During 2016 increases were observed for NRI (Not Received Issued) and account takeovers Although the losses related to these fraud types are still relatively small cards are attractive to criminals since legitimate cards and PINs are obtained through these modus operandi

Counterfeit credit card gross fraud losses inside South Africa increased by 227 (from R573m in 2015 to R704m in 2016) Counterfeit credit card fraud is the second biggest contributor (392) to the overall gross fraud loss on SA-Issued credit cards used in South Africa Although the overall counterfeit loss figure remained constant from 2015 to 2016 a change was observed in the fraudulent spend pattern The total gross fraud loss for counterfeit was R990m in 2016 Of that 71 (R704m) occurred in 2016 as opposed to 579 (R573m) in 2015

CNP fraud committed within South Africa increased by 233 from R708m in 2015 to R874m in 2016 A total of 486 of the overall gross fraud losses on credit cards used inside South Africa relates to CNP fraud

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2016201520142013201220112010

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2016201520142013201220112010

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3409

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4504

479

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20162015201420132012201120100

5

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20

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2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

10

GEOGRAPHICAL DISTRIBUTION OF CREDIT CARD FRAUD

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa Gauteng accounts for 572 of the credit card gross fraud losses followed by the Western Cape with 161 and KwaZulu Natal with 127

All provinces showed increases during 2016 with the exception of Western Cape where a decrease of 118 was observed

The biggest increases when comparing 2015 and 2016 occurred in the Eastern Cape (1480 from R35m to R87m) North West (1279 from R13m to R29m) Northern Cape (957 from R132 770 to R259 875) and Free State (899 from R721 111 to R14m)

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa

All provinces showed increases except

Western Cape with a decrease of 118

Provincial geographical distribution of credit card gross fraud losses All Figures in (R) Millions

Provincial geographical distribution during 2016

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R16m R24m R34m R26m R21m R35m R87m

Free State R14m ltR1m R12m ltR1m ltR1m ltR1m R14m

Gauteng R615 R1059m R787m R656m R949m R756m R931m

KwaZulu Natal R179m R102m R89m R94m R121m R121m R206m

Limpopo R22m R27m R23m R20m R38m R31m R39m

Mpumalanga R21m R15m R19m R21m R26m R37m R57m

Northern Cape ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

North West R16m R21m R17m R22m R19m R13m R29m

Western Cape R154m R458m R407m R328m R397m R297m R262m

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

11

Gross fraud losses due to fraud perpetrated with SA-issued debit cards increased slightly by 31 from R3332m in 2015 to R3435m in 2016

The graph below depicts the industryrsquos total gross fraud losses on SA-issued debit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued debit cards (All countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued debit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

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2010 02

02

07

06

06

01

02

0

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20162015201420132012201120100

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80

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200

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400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

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350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

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2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued debit cards during 2016

lostampstolen was the highest

Gross fraud losses due to fraud perpetrated with SA-issued debit cards

increased by 31

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

12

SA-issued debit card gross fraud losses per fraud type all countries All figures in (R) Millions

Debit card gross fraud losses on SA-issued debit cards (2010 to 2016) inside and outside South Africa All figures in (R) Millions

DEBIT CARD FRAUD DISTRIBUTION

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R142m R165m R210m R560m R1062m R1388m R1930m

NRI (Not Received Issued) ltR1m ltR1m ltR1m ltR1m ltR1m R11m R17m

False Application Fraud ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

Counterfeit R2024m R3645m R2869m R2114m R1558m R1360m R884m

Account Takeover ltR1m ltR1m ltR1m ltR1m ltR1m R16m R24m

CNP (Card Not Present) R77m R198m R286m R465m R615m R551m R576m

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

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2013

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2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Transactions in South Africa Transactions outside South Africa

WiseUpWatchOut

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

0

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20162015201420132012201120100

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2016201520142013201220112010

0 100 200 300 400 500 600

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0

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2016201520142013201220112010

0

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2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

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20162015201420132012201120100

5

10

15

20

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2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

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2016201520142013201220112010

3654

3409

3883

4504

479

5675

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20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

7

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R262m R173m R107m R89m R107m R116m R158m

NRI (Not Received Issued) R17m R12m ltR1m ltR1m ltR1m ltR1m R31m

False Application Fraud R24m R155m R194m R137m R932m R73m R19m

Counterfeit R972m R1655m R908m R1194m R1169m R990m R990m

Account Takeover ltR1m ltR1m R15m R23m ltR1m R18m R29m

CNP (Card Not Present) R815m R1887m R2138m R2389m R2407m R2104m R2500m

Credit card gross fraud losses on SA-issued credit card (2010 to 2016) inside and outside South Africa All Figures in (R) Millions

Transactions outside South Africa Transactions in South Africa

CREDIT CARD FRAUD DISTRIBUTION

SA-issued credit card gross fraud losses per fraud type all countries All Figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

8

2016 480 of all credit card gross fraud losses occurred inside South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased

by 189

During 2016 480 of all credit card gross fraud losses occurred inside the borders of South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased by 189 (R2104m in 2015 to R2500m in 2016) CNP fraud remained the biggest contributor to gross fraud losses on SA-issued credit cards (668) during 2016 The majority of the losses (651) associated with CNP credit card fraud occurred outside South Africa

Counterfeit credit card fraud accounted for 264 of the gross fraud losses on credit cards These losses remained stable with R990m reported in 2015 and 2016 The majority of losses (711) associated with counterfeit credit card transactions occurred within South Africa Fraudulent spend with lost andor stolen cards increased by 366 with 820 of the transactions occurring in South Africa

SA-issued credit cards are frequently used by criminals in African countries such as Zimbabwe Namibia Botswana Kenya and Lesotho Most of these transactions are fraudulent cash withdrawals at ATMrsquos An increase is observed in Mauritius where fraudulent 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

Five cross border countries with the highest recorded financial losses due to CNP and Counterfeit fraud on SA-issued credit cards during 2016 were

United States R414m United Kingdom

R19m

NetherlandsR59m

Counterfeit

CNP

United Kingdom R334m

CyprusR67m

China R52m

China R12m

Indonesia ltR1m

United States R134m

Canada ltR1m

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

9

SA-issued credit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

CREDIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Credit card gross fraud losses on SA-issued cards used in South Africa increased by 219 from R1475m in 2015 to R1798m in 2016

Lost andor stolen credit card gross fraud losses increased by 235 in 2016 from R105m (2015) to R129m (2016) Lost andor stolen credit card gross fraud losses account for 72 of the total credit card gross fraud losses in South Africa Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to circumvent fraud risk mitigation measures implemented by the banking industry

Transactions associated with false applications decreased by 10 during 2016 with the gross fraud loss decreasing from R61m (2015) to R18m (2016) Measures deployed in 2014 when online application channels were abused and the positive impact of biometric fingerprint verification utilised by the banks have proven to be effective and the fraud loss associated with false applications is currently at the lowest level since 2007

During 2016 increases were observed for NRI (Not Received Issued) and account takeovers Although the losses related to these fraud types are still relatively small cards are attractive to criminals since legitimate cards and PINs are obtained through these modus operandi

Counterfeit credit card gross fraud losses inside South Africa increased by 227 (from R573m in 2015 to R704m in 2016) Counterfeit credit card fraud is the second biggest contributor (392) to the overall gross fraud loss on SA-Issued credit cards used in South Africa Although the overall counterfeit loss figure remained constant from 2015 to 2016 a change was observed in the fraudulent spend pattern The total gross fraud loss for counterfeit was R990m in 2016 Of that 71 (R704m) occurred in 2016 as opposed to 579 (R573m) in 2015

CNP fraud committed within South Africa increased by 233 from R708m in 2015 to R874m in 2016 A total of 486 of the overall gross fraud losses on credit cards used inside South Africa relates to CNP fraud

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CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

10

GEOGRAPHICAL DISTRIBUTION OF CREDIT CARD FRAUD

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa Gauteng accounts for 572 of the credit card gross fraud losses followed by the Western Cape with 161 and KwaZulu Natal with 127

All provinces showed increases during 2016 with the exception of Western Cape where a decrease of 118 was observed

The biggest increases when comparing 2015 and 2016 occurred in the Eastern Cape (1480 from R35m to R87m) North West (1279 from R13m to R29m) Northern Cape (957 from R132 770 to R259 875) and Free State (899 from R721 111 to R14m)

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa

All provinces showed increases except

Western Cape with a decrease of 118

Provincial geographical distribution of credit card gross fraud losses All Figures in (R) Millions

Provincial geographical distribution during 2016

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R16m R24m R34m R26m R21m R35m R87m

Free State R14m ltR1m R12m ltR1m ltR1m ltR1m R14m

Gauteng R615 R1059m R787m R656m R949m R756m R931m

KwaZulu Natal R179m R102m R89m R94m R121m R121m R206m

Limpopo R22m R27m R23m R20m R38m R31m R39m

Mpumalanga R21m R15m R19m R21m R26m R37m R57m

Northern Cape ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

North West R16m R21m R17m R22m R19m R13m R29m

Western Cape R154m R458m R407m R328m R397m R297m R262m

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

11

Gross fraud losses due to fraud perpetrated with SA-issued debit cards increased slightly by 31 from R3332m in 2015 to R3435m in 2016

The graph below depicts the industryrsquos total gross fraud losses on SA-issued debit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued debit cards (All countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued debit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

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2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

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250

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0 50 100 150 200 250 300 350 400 450 500

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2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued debit cards during 2016

lostampstolen was the highest

Gross fraud losses due to fraud perpetrated with SA-issued debit cards

increased by 31

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

12

SA-issued debit card gross fraud losses per fraud type all countries All figures in (R) Millions

Debit card gross fraud losses on SA-issued debit cards (2010 to 2016) inside and outside South Africa All figures in (R) Millions

DEBIT CARD FRAUD DISTRIBUTION

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R142m R165m R210m R560m R1062m R1388m R1930m

NRI (Not Received Issued) ltR1m ltR1m ltR1m ltR1m ltR1m R11m R17m

False Application Fraud ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

Counterfeit R2024m R3645m R2869m R2114m R1558m R1360m R884m

Account Takeover ltR1m ltR1m ltR1m ltR1m ltR1m R16m R24m

CNP (Card Not Present) R77m R198m R286m R465m R615m R551m R576m

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

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120

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180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

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50

100

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300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Transactions in South Africa Transactions outside South Africa

WiseUpWatchOut

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

0

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20162015201420132012201120100

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CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

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Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

8

2016 480 of all credit card gross fraud losses occurred inside South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased

by 189

During 2016 480 of all credit card gross fraud losses occurred inside the borders of South Africa in comparison with the 445 in 2015

CNP credit card gross fraud losses increased by 189 (R2104m in 2015 to R2500m in 2016) CNP fraud remained the biggest contributor to gross fraud losses on SA-issued credit cards (668) during 2016 The majority of the losses (651) associated with CNP credit card fraud occurred outside South Africa

Counterfeit credit card fraud accounted for 264 of the gross fraud losses on credit cards These losses remained stable with R990m reported in 2015 and 2016 The majority of losses (711) associated with counterfeit credit card transactions occurred within South Africa Fraudulent spend with lost andor stolen cards increased by 366 with 820 of the transactions occurring in South Africa

SA-issued credit cards are frequently used by criminals in African countries such as Zimbabwe Namibia Botswana Kenya and Lesotho Most of these transactions are fraudulent cash withdrawals at ATMrsquos An increase is observed in Mauritius where fraudulent 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

Five cross border countries with the highest recorded financial losses due to CNP and Counterfeit fraud on SA-issued credit cards during 2016 were

United States R414m United Kingdom

R19m

NetherlandsR59m

Counterfeit

CNP

United Kingdom R334m

CyprusR67m

China R52m

China R12m

Indonesia ltR1m

United States R134m

Canada ltR1m

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

9

SA-issued credit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

CREDIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Credit card gross fraud losses on SA-issued cards used in South Africa increased by 219 from R1475m in 2015 to R1798m in 2016

Lost andor stolen credit card gross fraud losses increased by 235 in 2016 from R105m (2015) to R129m (2016) Lost andor stolen credit card gross fraud losses account for 72 of the total credit card gross fraud losses in South Africa Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to circumvent fraud risk mitigation measures implemented by the banking industry

Transactions associated with false applications decreased by 10 during 2016 with the gross fraud loss decreasing from R61m (2015) to R18m (2016) Measures deployed in 2014 when online application channels were abused and the positive impact of biometric fingerprint verification utilised by the banks have proven to be effective and the fraud loss associated with false applications is currently at the lowest level since 2007

During 2016 increases were observed for NRI (Not Received Issued) and account takeovers Although the losses related to these fraud types are still relatively small cards are attractive to criminals since legitimate cards and PINs are obtained through these modus operandi

Counterfeit credit card gross fraud losses inside South Africa increased by 227 (from R573m in 2015 to R704m in 2016) Counterfeit credit card fraud is the second biggest contributor (392) to the overall gross fraud loss on SA-Issued credit cards used in South Africa Although the overall counterfeit loss figure remained constant from 2015 to 2016 a change was observed in the fraudulent spend pattern The total gross fraud loss for counterfeit was R990m in 2016 Of that 71 (R704m) occurred in 2016 as opposed to 579 (R573m) in 2015

CNP fraud committed within South Africa increased by 233 from R708m in 2015 to R874m in 2016 A total of 486 of the overall gross fraud losses on credit cards used inside South Africa relates to CNP fraud

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CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

10

GEOGRAPHICAL DISTRIBUTION OF CREDIT CARD FRAUD

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa Gauteng accounts for 572 of the credit card gross fraud losses followed by the Western Cape with 161 and KwaZulu Natal with 127

All provinces showed increases during 2016 with the exception of Western Cape where a decrease of 118 was observed

The biggest increases when comparing 2015 and 2016 occurred in the Eastern Cape (1480 from R35m to R87m) North West (1279 from R13m to R29m) Northern Cape (957 from R132 770 to R259 875) and Free State (899 from R721 111 to R14m)

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa

All provinces showed increases except

Western Cape with a decrease of 118

Provincial geographical distribution of credit card gross fraud losses All Figures in (R) Millions

Provincial geographical distribution during 2016

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R16m R24m R34m R26m R21m R35m R87m

Free State R14m ltR1m R12m ltR1m ltR1m ltR1m R14m

Gauteng R615 R1059m R787m R656m R949m R756m R931m

KwaZulu Natal R179m R102m R89m R94m R121m R121m R206m

Limpopo R22m R27m R23m R20m R38m R31m R39m

Mpumalanga R21m R15m R19m R21m R26m R37m R57m

Northern Cape ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

North West R16m R21m R17m R22m R19m R13m R29m

Western Cape R154m R458m R407m R328m R397m R297m R262m

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

11

Gross fraud losses due to fraud perpetrated with SA-issued debit cards increased slightly by 31 from R3332m in 2015 to R3435m in 2016

The graph below depicts the industryrsquos total gross fraud losses on SA-issued debit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued debit cards (All countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued debit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

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02

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06

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2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

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0 50 100 150 200 250 300 350 400 450 500

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2014

2013

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2010

0 50 100 150 200 250 300 350 400 450 500

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2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

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2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

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0 05 10 15 2

2016

2015

2014

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2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

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2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

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2012

2011

2010

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2016

2015

2014

2013

2012

2011

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0

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2016201520142013201220112010

0 50 100 150 200 250

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190

194

237

151

89

37

31

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20

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40

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60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued debit cards during 2016

lostampstolen was the highest

Gross fraud losses due to fraud perpetrated with SA-issued debit cards

increased by 31

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

12

SA-issued debit card gross fraud losses per fraud type all countries All figures in (R) Millions

Debit card gross fraud losses on SA-issued debit cards (2010 to 2016) inside and outside South Africa All figures in (R) Millions

DEBIT CARD FRAUD DISTRIBUTION

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R142m R165m R210m R560m R1062m R1388m R1930m

NRI (Not Received Issued) ltR1m ltR1m ltR1m ltR1m ltR1m R11m R17m

False Application Fraud ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

Counterfeit R2024m R3645m R2869m R2114m R1558m R1360m R884m

Account Takeover ltR1m ltR1m ltR1m ltR1m ltR1m R16m R24m

CNP (Card Not Present) R77m R198m R286m R465m R615m R551m R576m

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

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60

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140

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180

200

20162015201420132012201120100

40

80

120

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200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

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2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

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2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

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2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

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2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

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60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Transactions in South Africa Transactions outside South Africa

WiseUpWatchOut

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

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20162015201420132012201120100

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2016201520142013201220112010

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20162015201420132012201120100

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2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

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20162015201420132012201120100

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Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

9

SA-issued credit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

CREDIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Credit card gross fraud losses on SA-issued cards used in South Africa increased by 219 from R1475m in 2015 to R1798m in 2016

Lost andor stolen credit card gross fraud losses increased by 235 in 2016 from R105m (2015) to R129m (2016) Lost andor stolen credit card gross fraud losses account for 72 of the total credit card gross fraud losses in South Africa Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to circumvent fraud risk mitigation measures implemented by the banking industry

Transactions associated with false applications decreased by 10 during 2016 with the gross fraud loss decreasing from R61m (2015) to R18m (2016) Measures deployed in 2014 when online application channels were abused and the positive impact of biometric fingerprint verification utilised by the banks have proven to be effective and the fraud loss associated with false applications is currently at the lowest level since 2007

During 2016 increases were observed for NRI (Not Received Issued) and account takeovers Although the losses related to these fraud types are still relatively small cards are attractive to criminals since legitimate cards and PINs are obtained through these modus operandi

Counterfeit credit card gross fraud losses inside South Africa increased by 227 (from R573m in 2015 to R704m in 2016) Counterfeit credit card fraud is the second biggest contributor (392) to the overall gross fraud loss on SA-Issued credit cards used in South Africa Although the overall counterfeit loss figure remained constant from 2015 to 2016 a change was observed in the fraudulent spend pattern The total gross fraud loss for counterfeit was R990m in 2016 Of that 71 (R704m) occurred in 2016 as opposed to 579 (R573m) in 2015

CNP fraud committed within South Africa increased by 233 from R708m in 2015 to R874m in 2016 A total of 486 of the overall gross fraud losses on credit cards used inside South Africa relates to CNP fraud

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CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

10

GEOGRAPHICAL DISTRIBUTION OF CREDIT CARD FRAUD

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa Gauteng accounts for 572 of the credit card gross fraud losses followed by the Western Cape with 161 and KwaZulu Natal with 127

All provinces showed increases during 2016 with the exception of Western Cape where a decrease of 118 was observed

The biggest increases when comparing 2015 and 2016 occurred in the Eastern Cape (1480 from R35m to R87m) North West (1279 from R13m to R29m) Northern Cape (957 from R132 770 to R259 875) and Free State (899 from R721 111 to R14m)

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa

All provinces showed increases except

Western Cape with a decrease of 118

Provincial geographical distribution of credit card gross fraud losses All Figures in (R) Millions

Provincial geographical distribution during 2016

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R16m R24m R34m R26m R21m R35m R87m

Free State R14m ltR1m R12m ltR1m ltR1m ltR1m R14m

Gauteng R615 R1059m R787m R656m R949m R756m R931m

KwaZulu Natal R179m R102m R89m R94m R121m R121m R206m

Limpopo R22m R27m R23m R20m R38m R31m R39m

Mpumalanga R21m R15m R19m R21m R26m R37m R57m

Northern Cape ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

North West R16m R21m R17m R22m R19m R13m R29m

Western Cape R154m R458m R407m R328m R397m R297m R262m

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

11

Gross fraud losses due to fraud perpetrated with SA-issued debit cards increased slightly by 31 from R3332m in 2015 to R3435m in 2016

The graph below depicts the industryrsquos total gross fraud losses on SA-issued debit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued debit cards (All countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued debit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

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2011

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02

07

06

06

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02

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240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

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250

2016201520142013201220112010

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0 50 100 150 200 250 300 350 400 450 500

2016

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0 5 10 15 20 25 30

2016

2015

2014

2013

2012

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2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

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2011

2010

190

194

237

151

89

37

31

0

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40

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60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued debit cards during 2016

lostampstolen was the highest

Gross fraud losses due to fraud perpetrated with SA-issued debit cards

increased by 31

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

12

SA-issued debit card gross fraud losses per fraud type all countries All figures in (R) Millions

Debit card gross fraud losses on SA-issued debit cards (2010 to 2016) inside and outside South Africa All figures in (R) Millions

DEBIT CARD FRAUD DISTRIBUTION

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R142m R165m R210m R560m R1062m R1388m R1930m

NRI (Not Received Issued) ltR1m ltR1m ltR1m ltR1m ltR1m R11m R17m

False Application Fraud ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

Counterfeit R2024m R3645m R2869m R2114m R1558m R1360m R884m

Account Takeover ltR1m ltR1m ltR1m ltR1m ltR1m R16m R24m

CNP (Card Not Present) R77m R198m R286m R465m R615m R551m R576m

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

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200

20162015201420132012201120100

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80

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200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

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400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

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2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Transactions in South Africa Transactions outside South Africa

WiseUpWatchOut

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

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CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

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2016201520142013201220112010

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2016201520142013201220112010

3654

3409

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479

5675

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20162015201420132012201120100

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Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

10

GEOGRAPHICAL DISTRIBUTION OF CREDIT CARD FRAUD

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa Gauteng accounts for 572 of the credit card gross fraud losses followed by the Western Cape with 161 and KwaZulu Natal with 127

All provinces showed increases during 2016 with the exception of Western Cape where a decrease of 118 was observed

The biggest increases when comparing 2015 and 2016 occurred in the Eastern Cape (1480 from R35m to R87m) North West (1279 from R13m to R29m) Northern Cape (957 from R132 770 to R259 875) and Free State (899 from R721 111 to R14m)

Gauteng Western Cape and KwaZulu Natal accounted for 859 of all credit card gross fraud losses in South Africa

All provinces showed increases except

Western Cape with a decrease of 118

Provincial geographical distribution of credit card gross fraud losses All Figures in (R) Millions

Provincial geographical distribution during 2016

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R16m R24m R34m R26m R21m R35m R87m

Free State R14m ltR1m R12m ltR1m ltR1m ltR1m R14m

Gauteng R615 R1059m R787m R656m R949m R756m R931m

KwaZulu Natal R179m R102m R89m R94m R121m R121m R206m

Limpopo R22m R27m R23m R20m R38m R31m R39m

Mpumalanga R21m R15m R19m R21m R26m R37m R57m

Northern Cape ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

North West R16m R21m R17m R22m R19m R13m R29m

Western Cape R154m R458m R407m R328m R397m R297m R262m

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

CREDIT CARD FRAUDOVERVIEW OF CREDIT CARD FRAUD (2010 ndash 2016)

11

Gross fraud losses due to fraud perpetrated with SA-issued debit cards increased slightly by 31 from R3332m in 2015 to R3435m in 2016

The graph below depicts the industryrsquos total gross fraud losses on SA-issued debit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued debit cards (All countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued debit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued debit cards during 2016

lostampstolen was the highest

Gross fraud losses due to fraud perpetrated with SA-issued debit cards

increased by 31

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

12

SA-issued debit card gross fraud losses per fraud type all countries All figures in (R) Millions

Debit card gross fraud losses on SA-issued debit cards (2010 to 2016) inside and outside South Africa All figures in (R) Millions

DEBIT CARD FRAUD DISTRIBUTION

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R142m R165m R210m R560m R1062m R1388m R1930m

NRI (Not Received Issued) ltR1m ltR1m ltR1m ltR1m ltR1m R11m R17m

False Application Fraud ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

Counterfeit R2024m R3645m R2869m R2114m R1558m R1360m R884m

Account Takeover ltR1m ltR1m ltR1m ltR1m ltR1m R16m R24m

CNP (Card Not Present) R77m R198m R286m R465m R615m R551m R576m

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Transactions in South Africa Transactions outside South Africa

WiseUpWatchOut

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

11

Gross fraud losses due to fraud perpetrated with SA-issued debit cards increased slightly by 31 from R3332m in 2015 to R3435m in 2016

The graph below depicts the industryrsquos total gross fraud losses on SA-issued debit cards irrespective of the geographical location of the fraudulent transaction

Gross fraud loss on SA-issued debit cards (All countries 2010 to 2016) All Figures in (R) Millions

Percentage distribution per fraud type on SA-issued debit cards during 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

In the of distribution per fraud type on SA-issued debit cards during 2016

lostampstolen was the highest

Gross fraud losses due to fraud perpetrated with SA-issued debit cards

increased by 31

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

12

SA-issued debit card gross fraud losses per fraud type all countries All figures in (R) Millions

Debit card gross fraud losses on SA-issued debit cards (2010 to 2016) inside and outside South Africa All figures in (R) Millions

DEBIT CARD FRAUD DISTRIBUTION

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R142m R165m R210m R560m R1062m R1388m R1930m

NRI (Not Received Issued) ltR1m ltR1m ltR1m ltR1m ltR1m R11m R17m

False Application Fraud ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

Counterfeit R2024m R3645m R2869m R2114m R1558m R1360m R884m

Account Takeover ltR1m ltR1m ltR1m ltR1m ltR1m R16m R24m

CNP (Card Not Present) R77m R198m R286m R465m R615m R551m R576m

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Transactions in South Africa Transactions outside South Africa

WiseUpWatchOut

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

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CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

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Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

12

SA-issued debit card gross fraud losses per fraud type all countries All figures in (R) Millions

Debit card gross fraud losses on SA-issued debit cards (2010 to 2016) inside and outside South Africa All figures in (R) Millions

DEBIT CARD FRAUD DISTRIBUTION

Fraud Type 2010 2011 2012 2013 2014 2015 2016

Lost andor Stolen R142m R165m R210m R560m R1062m R1388m R1930m

NRI (Not Received Issued) ltR1m ltR1m ltR1m ltR1m ltR1m R11m R17m

False Application Fraud ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m ltR1m

Counterfeit R2024m R3645m R2869m R2114m R1558m R1360m R884m

Account Takeover ltR1m ltR1m ltR1m ltR1m ltR1m R16m R24m

CNP (Card Not Present) R77m R198m R286m R465m R615m R551m R576m

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

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40

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100

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240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

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200

250

2016201520142013201220112010

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0 50 100 150 200 250 300 350 400 450 500

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0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

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2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

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0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

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2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

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120

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180

210

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2016201520142013201220112010

0 50 100 150 200 250

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190

194

237

151

89

37

31

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04

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Transactions in South Africa Transactions outside South Africa

WiseUpWatchOut

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

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CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

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Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

13

2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Gross losses for counterfeit debit card

fraud decreased by 350

During 2016 797 of debit card gross fraud losses occurred within South Africa compared to 786 in 2015

Debit card gross fraud losses related to CNP increased by 46 from R551m (2015) to R576m (2016) CNP fraud contributed 168 of fraud losses on SA-issued debit cards in 2016 This category is expected to grow due to the fact that CNP transactions are now allowed on debit cards and criminals will exploit the opportunity

Gross losses for counterfeit debit card fraud decreased by 350 (R1359m to R884m) The majority (741) of all counterfeit debit card transactions occurred within South Africa Counterfeit debit card fraud is currently the second largest contributor to the overall debit card gross fraud losses accounting for 257 of the gross fraud loss

Lost andor stolen debit card fraud is the biggest contributor to fraud losses on SA-issued debit cards (562) The majority (979) of all losses related to lost andor stolen cards occurs within the borders of South Africa Lost andor stolen debit card fraud increased by 391 from R1388m (2015) to R1931m (2016) Criminals utilised modus operandi like shoulder surfing card jamming or card swapping and card theft to obtain genuine cards and PINs and in so doing avoided detection by fraud risk mitigation measures deployed by banks SA-issued debit cards are frequently being used by criminals in African countries such as Zimbabwe Namibia Zambia Kenya and Mozambique Similar to credit cards these transactions mostly relate to fraudulent cash withdrawals at ATMs

The five countries with the highest recorded financial losses due to CNP and Counterfeit card fraud on SA-issued debit cards during 2016 are

United Kingdomgt1m

Counterfeit

CNP

United Kingdom R77m

CyprusR29m

LuxembourgR13m

China R15m

China R22m

Indonesia R35m

United States R44m

Brazil gtR1m

United States R82m

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

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CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

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Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

14

SA-issued debit card gross fraud loss inside SA by fraud type (2010 to 2016) All Figures in (R) Millions

DEBIT CARD GROSS FRAUD LOSS IN SOUTH AFRICA

Gross losses for debit card fraud on SA-issued cards used in South Africa increased by 46 from R2619m in 2015 to R2738m in 2016

Lost andor stolen debit card gross fraud losses increased by 399 in 2016 and accounts for 690 of the total debit card gross fraud losses inside South Africa In an attempt to overcome changes in business processes linked to Chip amp PIN cards criminals proceeded with modus operandi such as shoulder surfing card jamming or card swapping and card theft Lost andor stolen card gross fraud losses are currently at the highest level ever reported and amount to R1890m for 2016

Debit card gross fraud losses related to CNP decreased by 46 inside South Africa CNP fraud contributed 55 to the total fraud losses on SA-issued debit cards in 2016

Gross fraud losses associated with counterfeit debit card fraud inside South Africa decreased by 393 (from R1078m in 2015 to R655m in 2016) This decrease is attributed to the implementation of EMV chip cards The expected side effect is a decrease in counterfeit card fraud with an increase in CNP fraud

Gross fraud losses associated with NRI and account takeovers inside South Africa reflect the largest percentage increases NRI increased 659 from R964 480 (2015) to R16m (2016)

Account takeovers increased 466 from R16m (2015) to R24m (2016) Although these increases are substantial the losses are low when compared to the other fraud types However genuine cards and PINs are attractive to criminals and this modus operandi should therefore be monitored

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CNP

Account Takeover

Counterfeit

False Applications

NRI (Not Received Issued)

Lost Stolen

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

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2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

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2012

2011

2010

0

30

60

90

120

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2016201520142013201220112010

0

50

100

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2016201520142013201220112010

3654

3409

3883

4504

479

5675

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100

120

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180

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20162015201420132012201120100

5

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2016201520142013201220112010

Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

15

GEOGRAPHICAL DISTRIBUTION OF DEBIT CARD FRAUD

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa Gauteng accounts for 406 followed by KwaZulu Natal with 179 and the Western Cape with 94 The remaining provinces accounted for 321 of the gross fraud losses

With the exception of Western Cape all provinces showed an increase during 2016 Losses in KwaZulu Natal increased by 369 (from R327m to R448m) North West increased by 359 (from R122m to R166m) and Northern Cape increased 341 (from R23m to R31m)

Gauteng the Western Cape and KwaZulu Natal accounted for 679 of all debit card gross fraud losses in South Africa

Except for Western Cape all provinces

showed an increase

Provincial geographical distribution of debit card gross fraud losses All figures in (R) Millions

2010 2011 2012 2013 2014 2015 2016

Eastern Cape R152m R391m R233m R158m R152m R184m R217m

Free State R41m R81m R91m R82m R84m R79m R96m

Gauteng R589m R1197m R1215m R938m R919m R975m R1015m

KwaZulu Natal R238m R483m R494m R333m R287m R327m R448m

Limpopo R39m R78m R112m R115m R123m R131m R134m

Mpumalanga R57m R122m R149m R119m R107m R141m R158m

Northern Cape ltR1m R12m R10m R13m R21m R23m R31m

North West R41m R86m R139m R118m R135m R122m R166m

Western Cape R96m R257m R302m R253m R284m R274m R235m

Gauteng accounts for 406 of the gross fraud losses on debit cards

Gross fraud losses on debit cards

decreased in the Western Cape

DEBIT CARD FRAUDOVERVIEW OF DEBIT CARD FRAUD (2010 ndash 2016)

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

0

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60

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100

120

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160

180

200

20162015201420132012201120100

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2016201520142013201220112010

0 100 200 300 400 500 600

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0

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120

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2016201520142013201220112010

0

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300

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2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

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100

120

140

160

180

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20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

16

According to Financial Fraud Action UK gross fraud losses on UK cards increased by 18 from January to December 2015 when compared to the same period in 2014 These figures include the losses for debit and credit card fraud Card not present (CNP) fraud accounted for 702 of the total losses and increased by 20 when compared to 2015

Lost andor stolen card fraud increased by 241 and is currently at the highest level ever reported in the UK The gross loss for this fraud type is the second highest loss category (with only CNP reporting higher figures) Of thetotal fraud losses 131 can be attributed to lost andor stolen cards

Counterfeit fraud accounted for 80 of the total losses and showed a 52 decrease

Not received issued (NRI) and false applicationsaccount takeovers showed increases in the 2015 figures

South Africa mirrors the UK trend with increases in CNP and lost andor stolen card fraud The decrease in counterfeit fraud was also observed in the South African environment It is worth noting that NRI false applications and account takeovers showed increases which was also seen in South Africa

1 Source FRAUD THE FACTS 2016 - Financial Fraud Action UK

0

20

40

60

80

100

120

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160

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20162015201420132012201120100

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3654

3409

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5675

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120

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160

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20162015201420132012201120100

5

10

15

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2016201520142013201220112010

Card fraud losses in UK-Issued cards (2010 - 2015) All figures in (pound) pounds

Card not present (CNP) fraud in the UK accounted for 702 of the total losses

Gross fraud losses on UK cards increased by 18

CARD FRAUD IN THE UK

17

3 of the gross fraud losses on all SA-issued credit cards were reported as cash withdrawals at ATMs

The majority of transactions occurred

in Gauteng (555)

Analysis has highlighted that criminals still prefer cash as proceeds of crime in spite of the anonymity of the digital platforms Cash withdrawals at ATMs have remained prevalent in South Africa in contrast with jurisdictions like Australia where the number and value of ATM withdrawals dropped for the fourth consecutive year

OVERVIEW OF ATM TRANSACTIONS (CASH WITHDRAWALS) PERTAINING TO CREDIT CARD FRAUD (2016)

Three per cent (3) of the gross fraud losses on all SA-issued credit cards were reported as cash withdrawals at ATMs inside South Africa Of these losses 16 were in respect of lost andor stolen cards An exceptionally high percentage of the losses related to account takeovers (256) and false applications (279)

The majority of transactions occurred in Gauteng (555) followed by KwaZulu Natal (153) and Western Cape (121)

Gross fraud loss on SA-issued credit cards - ATM compared to other merchants (2016)

Provincial geographical distribution on SA-issued credit cards during 2016

2Source Connections amp Collaboration APCA Annual Review 2016

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

2

ATM CRIME

18

OVERVIEW OF ATM TRANSACTIONS (CASH WITHDRAWALS) PERTAINING TO DEBIT CARD FRAUD (2016)

Of the total gross fraud loss on all SA-issued debit cards inside South Africa 52 were reported as cash withdrawals at ATMs Most of the losses (77) related to lost andor stolen cards and 219 related to counterfeit cards

The majority of transactions occurred in Gauteng (348) followed by KwaZulu Natal (174) and Western Cape (88)

Analysis of card fraud activity in the vicinity of ATMs indicates that most of the cash withdrawals at ATMs are in respect of lost andor stolen debit cards

A similar geographical distribution per province is noted for fraudulent debit and credit card ATM transactions Gauteng the business hub of South Africa reflected the highest number of transactions followed by KwaZulu Natal and Western Cape This pattern correlates with the prevalence of financial crimes reported overall in the various provinces

Gross fraud loss on SA-issued debit cards ATM compared to other merchants (2016)

Provincial geographical distribution on SA-issued debitcards during 2016

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

52 of all fraud on SA-issued debit cards inside South Africa were reported as cash withdrawals at ATMs

The majority of transactions occurred

in Gauteng (348)

ATM CRIME

19

LOST ANDOR STOLEN CARD FRAUD DEFINITIONLost card fraud is a fraudulent transaction that occurs on a valid issued card after the cardholder has lost hisher card and is no longer in possession of it Stolen card fraud is performed on a valid issued card that has been stolen from a legitimate owner

LOST ANDOR STOLEN CARD FRAUD TREND

Lost andor stolen credit card fraud increased by 366 from R116m in 2015 to R158m in 2016 and accounted for 42 of the total gross fraud losses on credit cards The majority (820) of fraudulent transactions occurred inside South Africa

The highest gross fraud losses reported on lost andor stolen credit cards were in respect of fraudulent cash withdrawals and purchases at liquor stores service stations toll plazas and grocery stores

Lost andor stolen debit card fraud increased by 391 from R1388m in 2015 to R1931m in 2016 and accounted for 562 of the total gross fraud losses on debit cards Almost all (979) of the gross fraud losses occurred inside South Africa

The highest gross fraud losses in respect of lost andor stolen debit card fraud were in respect of cash withdrawals followed by purchases at liquor stores toll plazas grocery stores and drinking places (bars)

Lost andor stolen cards can be associated with various crime types including house robberies hijackings and street robberies However a frequently used modus operandi is card jamming or swapping and most prominent in 2016 was the theft of cards at ATM sites accompanied with shoulder surfing to obtain the PIN Criminals use ldquodistract and confuserdquo methods to obtain the card and PIN Every effort is made by the criminals to use the card as quickly as possible before it is cancelled by the legitimate cardholder Not only is the card used at the ATM but fraudulent purchases are also made to maximise proceeds of crime

Lost andor stolen debit card fraud (2010 to 2016) All figures in (R) Millions

Lost andor stolen credit card fraud (2010 to 2016) All figures in (R) Millions

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If you are not familiar with the screen layout of the ATM or if it appears that the machine has been tampered with do not insert your card

Should an ATM retain your card contact your bank and block your card before

you leave the ATM

Always block the pin pad when entering the card pin because your PIN is your personal key to secure

banking and it is crucial to keep it confidential on your account

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESLOST ANDOR STOLEN CARD FRAUD

20

NOT RECEIVED ISSUED CARD FRAUD (NRI) DEFINITIONNot received issued card fraud relates to the interception of a genuinely issued card before it reaches the customer Imposters then use the intercepted cards fraudulently

NOT RECEIVED ISSUED CARD FRAUD (NRI) TREND

Gross fraud losses for not received issued card fraud increased by 3241 from R733 474 in 2015 to R31m in 2016 Gross losses for credit card fraud associated with NRI accounted for 08 of the overall credit card losses Although the percentage increase is high the associated loss is still relatively low

Not received issued debit card gross fraud losses increased by 575 from R11m in 2015 to R17m in 2016 Debit card gross fraud losses associated with NRI cards accounted for 06 of the overall debit card fraud loss Again whilst the percentage increase is high the associated loss is still relatively low

This modus operandi places criminals in possession of genuine cards and PIN numbers in some instances and therefore Banks are continuously improving their processes in respect of card collections and PIN activations Prompt action to collect cards and the reporting of replacement cards that were not received within a reasonable time can further contribute to mitigation

Not received issued credit card fraud (2010 to 2016) All figures in (R) Millions

Not received issued debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

If you are expecting a replacement card and do not receive it in a reasonable

time alert your bank

If you receive any notification about an issued card which you did not apply for contact your

bank immediately and follow this up

Respond as soon as possible to a bank notification to collect an issued card

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESNOT RECEIVED ISSUED (NRI) CARD FRAUD

21

FALSE APPLICATION CARD FRAUD DEFINITIONFalse application fraud occurs when a fraudulent transaction is carried out on an account where the card was acquired by falsifying a credit application

FALSE APPLICATION CARD FRAUD TREND

During 2016 gross fraud losses associated with transactions following a false application decreased by 743 from R72m to R19m and accounted for 05 of the overall credit card gross fraud losses This highlights even further decreases after the mitigation measures rolled out in 2014

Losses related to false applications accounted for 005 of the total gross fraud loss on debit cards The gross fraud losses associated with the transactions following a false application for a debit card account increased slightly from R128961 to R167 142 This calculates to an increase of 296 although the values are not so significant

The banking industry continuously evaluates fraud detection and prevention strategies to mitigate the risk associated with false application fraud and the benefits thereof have been renowned after 2015 and is still visible in 2016 Traditional identity fraud modus operandi remain prevalent and forged supporting documentation often accompany false applications for cards

False application credit card fraud (2010 to 2016) All figures in (R) Million

False application debit card fraud (2010 to 2016) All figures in (R) Million

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Verify all requests for personal information and only give it out when

there is a legitimate reason to do so

If you suspect any suspicious activity on your account or you receive a statement for

an account you did not open ensure that you contact your bank immediately

Personal information must not be shared on social media as criminals can obtain it

easily and use it fraudulently

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESFALSE APPLICATION CARD FRAUD

22

COUNTERFEIT CARD FRAUD DEFINITIONCounterfeit card fraud is perpetrated with a card that has been illegally manufactured using information stolen from the magnetic strip of a genuinely issued card In some instances lost andor stolen cards andor old cards are re-encoded with information stolen from a genuine card for purposes of committing counterfeit card fraud The information needed for a counterfeit card is usually stolen through card skimming

COUNTERFEIT CARD FRAUD TREND

Counterfeit credit card fraud decreased slightly by 003 in 2016 (from R9904m to R9902m) and contributed 264 of the overall credit card gross fraud loss Most of the counterfeit credit card losses (711) occurred inside South Africa The percentage of losses occurring outside South Africa decreased by 314 with the losses inside South Africa increasing by 228 during 2016 compared to 2015

The highest gross fraud losses in respect of counterfeit credit card fraud related to purchases at grocery stores cash withdrawals at ATMs purchases at department stores liquor stores and service stations

Counterfeit debit card fraud decreased by 350 in 2016 and the gross fraud loss decreased from R1359m in 2015 to R884 in 2016 Counterfeit debit card fraud accounted for 257 of the total gross fraud loss on debit cards The majority of these losses (741) occurred inside South Africa

The highest gross fraud losses related to counterfeit debit card fraud relate to purchases at grocery stores department store clothing and liquor stores followed by cash withdrawals

Although counterfeit card fraud is no longer the greatest fraud loss category it remains of concern as it stillaccounts for a large portion of the gross fraud losses Criminals are currently abusing the ldquofall backrdquo optionresulting in an increase seen in the number of transactions occurring inside South Africa and more so related to POStransactionsThis is particularly noteworthy in transactions related to credit cards

The skimming of cards to obtain card information remains a prevalent modus operandi irrespective of themethodology used be it with Point Of Sale (POS) ATM mounted or handheld skimming devices Card skimming involves the illegal copying of encoded information from the magnetic strip of a legitimate card by means of a card reader with the intention of using the data for encoding counterfeit lost or stolen cards to transactfraudulently

Counterfeit debit card fraud (2010 to 2016)All figures in (R) Million

Counterfeit credit card fraud (2010 to 2016)All figures in (R) Million

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

BREAKDOWN OF FRAUD TYPESCOUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

23

Criminals steal legitimate POS devices and then illegally convert them into skimming devices These POS skimming devices are used to skim bank card information of unsuspecting victims

POS skimming devices retrieved (2014 to 2016)

POINT OF SALE (POS) SKIMMING DEVICES

POS skimming devices were retrieved in South Africa for the first time in 2014 In 2016 a total of 30 POS skimming devices were recovered by the South African Police and bank investigators These devices were retrieved in Gauteng (22) and Western Cape (8) respectively

Provincial distribution of POS skimming devices retrieved during 2016

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

24

ATM MOUNTED SKIMMING DEVICES

For 2016 a total of 15 ATM mounted skimming devices were recovered by the banking industry and law enforcement

ATM mounted skimming devices were retrieved in Gauteng (7) Mpumalanga (6) and North West (2)

ATM mounted skimming devices retrieved (2010 to 2016) All figures in (R) Millions

Provincial distribution of ATM mounted skimming devices retrieved in 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

For 2016 a total of 15 ATM mounted skimming devices were recovered

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

25

ATM MOUNTED SKIMMING DEVICES

ATM clients are encouraged to lookout for foreign objects attached to ATMs and urged to always conceal their PIN when transacting

ATM mounted skimming devices are not easily recognisable as they are manufactured to match the look and feel of the ATM An increase in detection by consumers has however been noted and can be correlated to the consistent awareness created by the banking industry The vigilance of consumers is contributing positively to the detection of ATM mounted skimming devices

CARD SKIMMING WITH HANDHELD DEVICES

A total of 31 handheld skimming devices were recovered in 2016 by either the South African Police or bank investigators

Handheld skimming devices retrieved (2010 to 2016)

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Fitted ATM card reader

Pin hole camera

The camera captures the PIN and the ATM cardreader captures the card data

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

26

HANDHELD SKIMMING DEVICES

During 2016 the majority (19) of these devices were recovered in Gauteng Eight in KwaZulu Natal two in North West and one in Mpumalanga and Western Cape respectively

The images below are examples of handheld skimming devices Despite the exponential evolution of technology these devices have not changed much in recent years Criminals are still using handheld skimming devices that fit into the palm of your hand and can easily be concealed The public is urged to report any individuals known to be importing or using these devices to compromise card data to the South African Police

Provincial distribution of retrieved handheld skimming devices

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

Do not allow anyone to swipe your card on a small black device

unknown to you

1

Always cover the PIN Pad whenentering the card pin

3

If you are interfered with whilst transacting at an ATM your card may have been skimmed by being removed and replaced back into

the ATM without your knowledgebull Ensure that you cancel the transaction immediately

bull Report the incident using your bankrsquos Stop Card Toll free number

2

WiseUpWatchOut

COUNTERFEIT CARD FRAUD

27

ACCOUNT TAKEOVER CARD FRAUD DEFINITIONAccount takeover fraud takes place when an existing account is taken over by someone posing as the genuine account holder who then uses the account for their own benefit whilst pretending to be the genuine account holder The common denominator for both Account Takeover fraud and False Application fraud is the fraudstersrsquo access to the personal information of their victims by obtaining personal or client-specific information and pretending to be the client in order to apply for a replacement card which is then once received used fraudulently

ACCOUNT TAKEOVER CARD FRAUD TREND

Credit card gross fraud losses associated with account takeover fraud increased by 630 (from R18m in 2015 to R29m in 2016) Account takeover fraud accounted for 08 of the overall credit card losses

Debit card gross fraud losses associated with account takeover fraud increased by 496 (from R16m in 2015 to R24m in 2016) Account takeover fraud accounted for 07 of the total gross fraud loss on debit cards

These are substantial percentage increases and the fact that the losses are relatively low when compared to the other fraud types it should not be considered tolerable Monitoring is essential as the cards are in demand by the criminals since legitimate cards and PINs are obtained The rise in account takeover card fraud is in line with increasing identity theft trends

Account takeover credit card fraud (2010 to 2016) All figures in (R) Millions

Account takeover debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Only give out your bank card number or other sensitive information on calls that you initiate to

your bankrsquos customer service division

1

Avoid returning calls to a phone number left on your answering services rather contact the

bank via the numbers provided on the card or the website of the bank

3

Keep your transaction slips and check them against your statement to spot any suspicious transactions

which if found must be queried with your bank immediately

2

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESACCOUNT TAKEOVER CARD FRAUD

28

CARD NOT PRESENT FRAUD DEFINITIONCNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting transactions These transactions occur when retailers are unable to check the card or the identity of the cardholder and can be conducted under the following circumstances orders for goods placed telephonically purchases conducted via the internet by mail order or fax CNP fraud is generally concluded with fraudulently obtained card data and personal information and sourced by various means such as discarded receipts previous CNP purchases and phishing

CARD NOT PRESENT FRAUD TREND

Gross fraud losses for CNP credit card increased by 189 from R2104m in 2015 to R2500m in 2016 and contributed 668 of the total credit card gross fraud losses in 2016 This is the highest level of CNP fraud reported to SABRIC with the second highest being R2407m gross losses reported in 2014 A total of 651 of the gross fraud losses relates to transactions outside of South Africa with the remaining 349 having occurred at South African merchants

The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services including airline tickets travel agencies vehicle hire and hotel accommodation as well as direct marketing

During 2016 the gross fraud loss associated with CNP fraud on debit cards amounted to R577m and contributed 168 of the total gross fraud loss on debit cards CNP gross fraud losses increased from R551m in 2015 to R577m in 2016 The majority of these transactions (737) occurred at merchants outside of South Africa with the remaining 263 occurring at South African merchants

The highest gross fraud losses related to CNP debit card fraud was also linked to the travel industry and included ie airline tickets vehicle hire and hotel accommodation

The increase in CNP fraud is a trend noted in EMV compliant countries such as the UK and South Africa is following a similar pattern The implementation of 3D secure at many South African online merchants could be a contributing factor for the move towards the South African cards used at non-South African merchants CNP fraud on debit cards is expected to increase as CNP transactions are now allowed on debit cards

Criminals source data to perpetrate CNP fraud using various modus operandi including but not limited to phishing scams vishing malware and data breaches

CNP credit card fraud (2010 to 2016) All figures in (R) Millions

CNP debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Emails that quote card numbers and expiry dates should never be sent nor should this information be disclosed

telephonically

Ensure you only place orders with your card on a reputable and secure website

when shopping online

Ensure that your bankcards are registered for 3D Secure ndash contact your

bank for more information on 3D Secure registration

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESCARD NOT PRESENT FRAUD

011 847 3000wwwsabriccoza

SabricZA SabricZASabric

19

LOST ANDOR STOLEN CARD FRAUD DEFINITIONLost card fraud is a fraudulent transaction that occurs on a valid issued card after the cardholder has lost hisher card and is no longer in possession of it Stolen card fraud is performed on a valid issued card that has been stolen from a legitimate owner

LOST ANDOR STOLEN CARD FRAUD TREND

Lost andor stolen credit card fraud increased by 366 from R116m in 2015 to R158m in 2016 and accounted for 42 of the total gross fraud losses on credit cards The majority (820) of fraudulent transactions occurred inside South Africa

The highest gross fraud losses reported on lost andor stolen credit cards were in respect of fraudulent cash withdrawals and purchases at liquor stores service stations toll plazas and grocery stores

Lost andor stolen debit card fraud increased by 391 from R1388m in 2015 to R1931m in 2016 and accounted for 562 of the total gross fraud losses on debit cards Almost all (979) of the gross fraud losses occurred inside South Africa

The highest gross fraud losses in respect of lost andor stolen debit card fraud were in respect of cash withdrawals followed by purchases at liquor stores toll plazas grocery stores and drinking places (bars)

Lost andor stolen cards can be associated with various crime types including house robberies hijackings and street robberies However a frequently used modus operandi is card jamming or swapping and most prominent in 2016 was the theft of cards at ATM sites accompanied with shoulder surfing to obtain the PIN Criminals use ldquodistract and confuserdquo methods to obtain the card and PIN Every effort is made by the criminals to use the card as quickly as possible before it is cancelled by the legitimate cardholder Not only is the card used at the ATM but fraudulent purchases are also made to maximise proceeds of crime

Lost andor stolen debit card fraud (2010 to 2016) All figures in (R) Millions

Lost andor stolen credit card fraud (2010 to 2016) All figures in (R) Millions

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

0 100 200 300 400 500 600

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

2016201520142013201220112010

0

50

100

150

200

250

300

350

2016201520142013201220112010

3654

3409

3883

4504

479

5675

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

5

10

15

20

25

30

2016201520142013201220112010

If you are not familiar with the screen layout of the ATM or if it appears that the machine has been tampered with do not insert your card

Should an ATM retain your card contact your bank and block your card before

you leave the ATM

Always block the pin pad when entering the card pin because your PIN is your personal key to secure

banking and it is crucial to keep it confidential on your account

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESLOST ANDOR STOLEN CARD FRAUD

20

NOT RECEIVED ISSUED CARD FRAUD (NRI) DEFINITIONNot received issued card fraud relates to the interception of a genuinely issued card before it reaches the customer Imposters then use the intercepted cards fraudulently

NOT RECEIVED ISSUED CARD FRAUD (NRI) TREND

Gross fraud losses for not received issued card fraud increased by 3241 from R733 474 in 2015 to R31m in 2016 Gross losses for credit card fraud associated with NRI accounted for 08 of the overall credit card losses Although the percentage increase is high the associated loss is still relatively low

Not received issued debit card gross fraud losses increased by 575 from R11m in 2015 to R17m in 2016 Debit card gross fraud losses associated with NRI cards accounted for 06 of the overall debit card fraud loss Again whilst the percentage increase is high the associated loss is still relatively low

This modus operandi places criminals in possession of genuine cards and PIN numbers in some instances and therefore Banks are continuously improving their processes in respect of card collections and PIN activations Prompt action to collect cards and the reporting of replacement cards that were not received within a reasonable time can further contribute to mitigation

Not received issued credit card fraud (2010 to 2016) All figures in (R) Millions

Not received issued debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

If you are expecting a replacement card and do not receive it in a reasonable

time alert your bank

If you receive any notification about an issued card which you did not apply for contact your

bank immediately and follow this up

Respond as soon as possible to a bank notification to collect an issued card

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESNOT RECEIVED ISSUED (NRI) CARD FRAUD

21

FALSE APPLICATION CARD FRAUD DEFINITIONFalse application fraud occurs when a fraudulent transaction is carried out on an account where the card was acquired by falsifying a credit application

FALSE APPLICATION CARD FRAUD TREND

During 2016 gross fraud losses associated with transactions following a false application decreased by 743 from R72m to R19m and accounted for 05 of the overall credit card gross fraud losses This highlights even further decreases after the mitigation measures rolled out in 2014

Losses related to false applications accounted for 005 of the total gross fraud loss on debit cards The gross fraud losses associated with the transactions following a false application for a debit card account increased slightly from R128961 to R167 142 This calculates to an increase of 296 although the values are not so significant

The banking industry continuously evaluates fraud detection and prevention strategies to mitigate the risk associated with false application fraud and the benefits thereof have been renowned after 2015 and is still visible in 2016 Traditional identity fraud modus operandi remain prevalent and forged supporting documentation often accompany false applications for cards

False application credit card fraud (2010 to 2016) All figures in (R) Million

False application debit card fraud (2010 to 2016) All figures in (R) Million

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Verify all requests for personal information and only give it out when

there is a legitimate reason to do so

If you suspect any suspicious activity on your account or you receive a statement for

an account you did not open ensure that you contact your bank immediately

Personal information must not be shared on social media as criminals can obtain it

easily and use it fraudulently

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESFALSE APPLICATION CARD FRAUD

22

COUNTERFEIT CARD FRAUD DEFINITIONCounterfeit card fraud is perpetrated with a card that has been illegally manufactured using information stolen from the magnetic strip of a genuinely issued card In some instances lost andor stolen cards andor old cards are re-encoded with information stolen from a genuine card for purposes of committing counterfeit card fraud The information needed for a counterfeit card is usually stolen through card skimming

COUNTERFEIT CARD FRAUD TREND

Counterfeit credit card fraud decreased slightly by 003 in 2016 (from R9904m to R9902m) and contributed 264 of the overall credit card gross fraud loss Most of the counterfeit credit card losses (711) occurred inside South Africa The percentage of losses occurring outside South Africa decreased by 314 with the losses inside South Africa increasing by 228 during 2016 compared to 2015

The highest gross fraud losses in respect of counterfeit credit card fraud related to purchases at grocery stores cash withdrawals at ATMs purchases at department stores liquor stores and service stations

Counterfeit debit card fraud decreased by 350 in 2016 and the gross fraud loss decreased from R1359m in 2015 to R884 in 2016 Counterfeit debit card fraud accounted for 257 of the total gross fraud loss on debit cards The majority of these losses (741) occurred inside South Africa

The highest gross fraud losses related to counterfeit debit card fraud relate to purchases at grocery stores department store clothing and liquor stores followed by cash withdrawals

Although counterfeit card fraud is no longer the greatest fraud loss category it remains of concern as it stillaccounts for a large portion of the gross fraud losses Criminals are currently abusing the ldquofall backrdquo optionresulting in an increase seen in the number of transactions occurring inside South Africa and more so related to POStransactionsThis is particularly noteworthy in transactions related to credit cards

The skimming of cards to obtain card information remains a prevalent modus operandi irrespective of themethodology used be it with Point Of Sale (POS) ATM mounted or handheld skimming devices Card skimming involves the illegal copying of encoded information from the magnetic strip of a legitimate card by means of a card reader with the intention of using the data for encoding counterfeit lost or stolen cards to transactfraudulently

Counterfeit debit card fraud (2010 to 2016)All figures in (R) Million

Counterfeit credit card fraud (2010 to 2016)All figures in (R) Million

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

BREAKDOWN OF FRAUD TYPESCOUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

23

Criminals steal legitimate POS devices and then illegally convert them into skimming devices These POS skimming devices are used to skim bank card information of unsuspecting victims

POS skimming devices retrieved (2014 to 2016)

POINT OF SALE (POS) SKIMMING DEVICES

POS skimming devices were retrieved in South Africa for the first time in 2014 In 2016 a total of 30 POS skimming devices were recovered by the South African Police and bank investigators These devices were retrieved in Gauteng (22) and Western Cape (8) respectively

Provincial distribution of POS skimming devices retrieved during 2016

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

24

ATM MOUNTED SKIMMING DEVICES

For 2016 a total of 15 ATM mounted skimming devices were recovered by the banking industry and law enforcement

ATM mounted skimming devices were retrieved in Gauteng (7) Mpumalanga (6) and North West (2)

ATM mounted skimming devices retrieved (2010 to 2016) All figures in (R) Millions

Provincial distribution of ATM mounted skimming devices retrieved in 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

For 2016 a total of 15 ATM mounted skimming devices were recovered

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

25

ATM MOUNTED SKIMMING DEVICES

ATM clients are encouraged to lookout for foreign objects attached to ATMs and urged to always conceal their PIN when transacting

ATM mounted skimming devices are not easily recognisable as they are manufactured to match the look and feel of the ATM An increase in detection by consumers has however been noted and can be correlated to the consistent awareness created by the banking industry The vigilance of consumers is contributing positively to the detection of ATM mounted skimming devices

CARD SKIMMING WITH HANDHELD DEVICES

A total of 31 handheld skimming devices were recovered in 2016 by either the South African Police or bank investigators

Handheld skimming devices retrieved (2010 to 2016)

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Fitted ATM card reader

Pin hole camera

The camera captures the PIN and the ATM cardreader captures the card data

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

26

HANDHELD SKIMMING DEVICES

During 2016 the majority (19) of these devices were recovered in Gauteng Eight in KwaZulu Natal two in North West and one in Mpumalanga and Western Cape respectively

The images below are examples of handheld skimming devices Despite the exponential evolution of technology these devices have not changed much in recent years Criminals are still using handheld skimming devices that fit into the palm of your hand and can easily be concealed The public is urged to report any individuals known to be importing or using these devices to compromise card data to the South African Police

Provincial distribution of retrieved handheld skimming devices

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

Do not allow anyone to swipe your card on a small black device

unknown to you

1

Always cover the PIN Pad whenentering the card pin

3

If you are interfered with whilst transacting at an ATM your card may have been skimmed by being removed and replaced back into

the ATM without your knowledgebull Ensure that you cancel the transaction immediately

bull Report the incident using your bankrsquos Stop Card Toll free number

2

WiseUpWatchOut

COUNTERFEIT CARD FRAUD

27

ACCOUNT TAKEOVER CARD FRAUD DEFINITIONAccount takeover fraud takes place when an existing account is taken over by someone posing as the genuine account holder who then uses the account for their own benefit whilst pretending to be the genuine account holder The common denominator for both Account Takeover fraud and False Application fraud is the fraudstersrsquo access to the personal information of their victims by obtaining personal or client-specific information and pretending to be the client in order to apply for a replacement card which is then once received used fraudulently

ACCOUNT TAKEOVER CARD FRAUD TREND

Credit card gross fraud losses associated with account takeover fraud increased by 630 (from R18m in 2015 to R29m in 2016) Account takeover fraud accounted for 08 of the overall credit card losses

Debit card gross fraud losses associated with account takeover fraud increased by 496 (from R16m in 2015 to R24m in 2016) Account takeover fraud accounted for 07 of the total gross fraud loss on debit cards

These are substantial percentage increases and the fact that the losses are relatively low when compared to the other fraud types it should not be considered tolerable Monitoring is essential as the cards are in demand by the criminals since legitimate cards and PINs are obtained The rise in account takeover card fraud is in line with increasing identity theft trends

Account takeover credit card fraud (2010 to 2016) All figures in (R) Millions

Account takeover debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

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200

20162015201420132012201120100

40

80

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360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Only give out your bank card number or other sensitive information on calls that you initiate to

your bankrsquos customer service division

1

Avoid returning calls to a phone number left on your answering services rather contact the

bank via the numbers provided on the card or the website of the bank

3

Keep your transaction slips and check them against your statement to spot any suspicious transactions

which if found must be queried with your bank immediately

2

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESACCOUNT TAKEOVER CARD FRAUD

28

CARD NOT PRESENT FRAUD DEFINITIONCNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting transactions These transactions occur when retailers are unable to check the card or the identity of the cardholder and can be conducted under the following circumstances orders for goods placed telephonically purchases conducted via the internet by mail order or fax CNP fraud is generally concluded with fraudulently obtained card data and personal information and sourced by various means such as discarded receipts previous CNP purchases and phishing

CARD NOT PRESENT FRAUD TREND

Gross fraud losses for CNP credit card increased by 189 from R2104m in 2015 to R2500m in 2016 and contributed 668 of the total credit card gross fraud losses in 2016 This is the highest level of CNP fraud reported to SABRIC with the second highest being R2407m gross losses reported in 2014 A total of 651 of the gross fraud losses relates to transactions outside of South Africa with the remaining 349 having occurred at South African merchants

The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services including airline tickets travel agencies vehicle hire and hotel accommodation as well as direct marketing

During 2016 the gross fraud loss associated with CNP fraud on debit cards amounted to R577m and contributed 168 of the total gross fraud loss on debit cards CNP gross fraud losses increased from R551m in 2015 to R577m in 2016 The majority of these transactions (737) occurred at merchants outside of South Africa with the remaining 263 occurring at South African merchants

The highest gross fraud losses related to CNP debit card fraud was also linked to the travel industry and included ie airline tickets vehicle hire and hotel accommodation

The increase in CNP fraud is a trend noted in EMV compliant countries such as the UK and South Africa is following a similar pattern The implementation of 3D secure at many South African online merchants could be a contributing factor for the move towards the South African cards used at non-South African merchants CNP fraud on debit cards is expected to increase as CNP transactions are now allowed on debit cards

Criminals source data to perpetrate CNP fraud using various modus operandi including but not limited to phishing scams vishing malware and data breaches

CNP credit card fraud (2010 to 2016) All figures in (R) Millions

CNP debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Emails that quote card numbers and expiry dates should never be sent nor should this information be disclosed

telephonically

Ensure you only place orders with your card on a reputable and secure website

when shopping online

Ensure that your bankcards are registered for 3D Secure ndash contact your

bank for more information on 3D Secure registration

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESCARD NOT PRESENT FRAUD

011 847 3000wwwsabriccoza

SabricZA SabricZASabric

20

NOT RECEIVED ISSUED CARD FRAUD (NRI) DEFINITIONNot received issued card fraud relates to the interception of a genuinely issued card before it reaches the customer Imposters then use the intercepted cards fraudulently

NOT RECEIVED ISSUED CARD FRAUD (NRI) TREND

Gross fraud losses for not received issued card fraud increased by 3241 from R733 474 in 2015 to R31m in 2016 Gross losses for credit card fraud associated with NRI accounted for 08 of the overall credit card losses Although the percentage increase is high the associated loss is still relatively low

Not received issued debit card gross fraud losses increased by 575 from R11m in 2015 to R17m in 2016 Debit card gross fraud losses associated with NRI cards accounted for 06 of the overall debit card fraud loss Again whilst the percentage increase is high the associated loss is still relatively low

This modus operandi places criminals in possession of genuine cards and PIN numbers in some instances and therefore Banks are continuously improving their processes in respect of card collections and PIN activations Prompt action to collect cards and the reporting of replacement cards that were not received within a reasonable time can further contribute to mitigation

Not received issued credit card fraud (2010 to 2016) All figures in (R) Millions

Not received issued debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

If you are expecting a replacement card and do not receive it in a reasonable

time alert your bank

If you receive any notification about an issued card which you did not apply for contact your

bank immediately and follow this up

Respond as soon as possible to a bank notification to collect an issued card

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESNOT RECEIVED ISSUED (NRI) CARD FRAUD

21

FALSE APPLICATION CARD FRAUD DEFINITIONFalse application fraud occurs when a fraudulent transaction is carried out on an account where the card was acquired by falsifying a credit application

FALSE APPLICATION CARD FRAUD TREND

During 2016 gross fraud losses associated with transactions following a false application decreased by 743 from R72m to R19m and accounted for 05 of the overall credit card gross fraud losses This highlights even further decreases after the mitigation measures rolled out in 2014

Losses related to false applications accounted for 005 of the total gross fraud loss on debit cards The gross fraud losses associated with the transactions following a false application for a debit card account increased slightly from R128961 to R167 142 This calculates to an increase of 296 although the values are not so significant

The banking industry continuously evaluates fraud detection and prevention strategies to mitigate the risk associated with false application fraud and the benefits thereof have been renowned after 2015 and is still visible in 2016 Traditional identity fraud modus operandi remain prevalent and forged supporting documentation often accompany false applications for cards

False application credit card fraud (2010 to 2016) All figures in (R) Million

False application debit card fraud (2010 to 2016) All figures in (R) Million

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Verify all requests for personal information and only give it out when

there is a legitimate reason to do so

If you suspect any suspicious activity on your account or you receive a statement for

an account you did not open ensure that you contact your bank immediately

Personal information must not be shared on social media as criminals can obtain it

easily and use it fraudulently

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESFALSE APPLICATION CARD FRAUD

22

COUNTERFEIT CARD FRAUD DEFINITIONCounterfeit card fraud is perpetrated with a card that has been illegally manufactured using information stolen from the magnetic strip of a genuinely issued card In some instances lost andor stolen cards andor old cards are re-encoded with information stolen from a genuine card for purposes of committing counterfeit card fraud The information needed for a counterfeit card is usually stolen through card skimming

COUNTERFEIT CARD FRAUD TREND

Counterfeit credit card fraud decreased slightly by 003 in 2016 (from R9904m to R9902m) and contributed 264 of the overall credit card gross fraud loss Most of the counterfeit credit card losses (711) occurred inside South Africa The percentage of losses occurring outside South Africa decreased by 314 with the losses inside South Africa increasing by 228 during 2016 compared to 2015

The highest gross fraud losses in respect of counterfeit credit card fraud related to purchases at grocery stores cash withdrawals at ATMs purchases at department stores liquor stores and service stations

Counterfeit debit card fraud decreased by 350 in 2016 and the gross fraud loss decreased from R1359m in 2015 to R884 in 2016 Counterfeit debit card fraud accounted for 257 of the total gross fraud loss on debit cards The majority of these losses (741) occurred inside South Africa

The highest gross fraud losses related to counterfeit debit card fraud relate to purchases at grocery stores department store clothing and liquor stores followed by cash withdrawals

Although counterfeit card fraud is no longer the greatest fraud loss category it remains of concern as it stillaccounts for a large portion of the gross fraud losses Criminals are currently abusing the ldquofall backrdquo optionresulting in an increase seen in the number of transactions occurring inside South Africa and more so related to POStransactionsThis is particularly noteworthy in transactions related to credit cards

The skimming of cards to obtain card information remains a prevalent modus operandi irrespective of themethodology used be it with Point Of Sale (POS) ATM mounted or handheld skimming devices Card skimming involves the illegal copying of encoded information from the magnetic strip of a legitimate card by means of a card reader with the intention of using the data for encoding counterfeit lost or stolen cards to transactfraudulently

Counterfeit debit card fraud (2010 to 2016)All figures in (R) Million

Counterfeit credit card fraud (2010 to 2016)All figures in (R) Million

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

BREAKDOWN OF FRAUD TYPESCOUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

23

Criminals steal legitimate POS devices and then illegally convert them into skimming devices These POS skimming devices are used to skim bank card information of unsuspecting victims

POS skimming devices retrieved (2014 to 2016)

POINT OF SALE (POS) SKIMMING DEVICES

POS skimming devices were retrieved in South Africa for the first time in 2014 In 2016 a total of 30 POS skimming devices were recovered by the South African Police and bank investigators These devices were retrieved in Gauteng (22) and Western Cape (8) respectively

Provincial distribution of POS skimming devices retrieved during 2016

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

24

ATM MOUNTED SKIMMING DEVICES

For 2016 a total of 15 ATM mounted skimming devices were recovered by the banking industry and law enforcement

ATM mounted skimming devices were retrieved in Gauteng (7) Mpumalanga (6) and North West (2)

ATM mounted skimming devices retrieved (2010 to 2016) All figures in (R) Millions

Provincial distribution of ATM mounted skimming devices retrieved in 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

For 2016 a total of 15 ATM mounted skimming devices were recovered

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

25

ATM MOUNTED SKIMMING DEVICES

ATM clients are encouraged to lookout for foreign objects attached to ATMs and urged to always conceal their PIN when transacting

ATM mounted skimming devices are not easily recognisable as they are manufactured to match the look and feel of the ATM An increase in detection by consumers has however been noted and can be correlated to the consistent awareness created by the banking industry The vigilance of consumers is contributing positively to the detection of ATM mounted skimming devices

CARD SKIMMING WITH HANDHELD DEVICES

A total of 31 handheld skimming devices were recovered in 2016 by either the South African Police or bank investigators

Handheld skimming devices retrieved (2010 to 2016)

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Fitted ATM card reader

Pin hole camera

The camera captures the PIN and the ATM cardreader captures the card data

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

26

HANDHELD SKIMMING DEVICES

During 2016 the majority (19) of these devices were recovered in Gauteng Eight in KwaZulu Natal two in North West and one in Mpumalanga and Western Cape respectively

The images below are examples of handheld skimming devices Despite the exponential evolution of technology these devices have not changed much in recent years Criminals are still using handheld skimming devices that fit into the palm of your hand and can easily be concealed The public is urged to report any individuals known to be importing or using these devices to compromise card data to the South African Police

Provincial distribution of retrieved handheld skimming devices

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

Do not allow anyone to swipe your card on a small black device

unknown to you

1

Always cover the PIN Pad whenentering the card pin

3

If you are interfered with whilst transacting at an ATM your card may have been skimmed by being removed and replaced back into

the ATM without your knowledgebull Ensure that you cancel the transaction immediately

bull Report the incident using your bankrsquos Stop Card Toll free number

2

WiseUpWatchOut

COUNTERFEIT CARD FRAUD

27

ACCOUNT TAKEOVER CARD FRAUD DEFINITIONAccount takeover fraud takes place when an existing account is taken over by someone posing as the genuine account holder who then uses the account for their own benefit whilst pretending to be the genuine account holder The common denominator for both Account Takeover fraud and False Application fraud is the fraudstersrsquo access to the personal information of their victims by obtaining personal or client-specific information and pretending to be the client in order to apply for a replacement card which is then once received used fraudulently

ACCOUNT TAKEOVER CARD FRAUD TREND

Credit card gross fraud losses associated with account takeover fraud increased by 630 (from R18m in 2015 to R29m in 2016) Account takeover fraud accounted for 08 of the overall credit card losses

Debit card gross fraud losses associated with account takeover fraud increased by 496 (from R16m in 2015 to R24m in 2016) Account takeover fraud accounted for 07 of the total gross fraud loss on debit cards

These are substantial percentage increases and the fact that the losses are relatively low when compared to the other fraud types it should not be considered tolerable Monitoring is essential as the cards are in demand by the criminals since legitimate cards and PINs are obtained The rise in account takeover card fraud is in line with increasing identity theft trends

Account takeover credit card fraud (2010 to 2016) All figures in (R) Millions

Account takeover debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Only give out your bank card number or other sensitive information on calls that you initiate to

your bankrsquos customer service division

1

Avoid returning calls to a phone number left on your answering services rather contact the

bank via the numbers provided on the card or the website of the bank

3

Keep your transaction slips and check them against your statement to spot any suspicious transactions

which if found must be queried with your bank immediately

2

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESACCOUNT TAKEOVER CARD FRAUD

28

CARD NOT PRESENT FRAUD DEFINITIONCNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting transactions These transactions occur when retailers are unable to check the card or the identity of the cardholder and can be conducted under the following circumstances orders for goods placed telephonically purchases conducted via the internet by mail order or fax CNP fraud is generally concluded with fraudulently obtained card data and personal information and sourced by various means such as discarded receipts previous CNP purchases and phishing

CARD NOT PRESENT FRAUD TREND

Gross fraud losses for CNP credit card increased by 189 from R2104m in 2015 to R2500m in 2016 and contributed 668 of the total credit card gross fraud losses in 2016 This is the highest level of CNP fraud reported to SABRIC with the second highest being R2407m gross losses reported in 2014 A total of 651 of the gross fraud losses relates to transactions outside of South Africa with the remaining 349 having occurred at South African merchants

The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services including airline tickets travel agencies vehicle hire and hotel accommodation as well as direct marketing

During 2016 the gross fraud loss associated with CNP fraud on debit cards amounted to R577m and contributed 168 of the total gross fraud loss on debit cards CNP gross fraud losses increased from R551m in 2015 to R577m in 2016 The majority of these transactions (737) occurred at merchants outside of South Africa with the remaining 263 occurring at South African merchants

The highest gross fraud losses related to CNP debit card fraud was also linked to the travel industry and included ie airline tickets vehicle hire and hotel accommodation

The increase in CNP fraud is a trend noted in EMV compliant countries such as the UK and South Africa is following a similar pattern The implementation of 3D secure at many South African online merchants could be a contributing factor for the move towards the South African cards used at non-South African merchants CNP fraud on debit cards is expected to increase as CNP transactions are now allowed on debit cards

Criminals source data to perpetrate CNP fraud using various modus operandi including but not limited to phishing scams vishing malware and data breaches

CNP credit card fraud (2010 to 2016) All figures in (R) Millions

CNP debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Emails that quote card numbers and expiry dates should never be sent nor should this information be disclosed

telephonically

Ensure you only place orders with your card on a reputable and secure website

when shopping online

Ensure that your bankcards are registered for 3D Secure ndash contact your

bank for more information on 3D Secure registration

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESCARD NOT PRESENT FRAUD

011 847 3000wwwsabriccoza

SabricZA SabricZASabric

21

FALSE APPLICATION CARD FRAUD DEFINITIONFalse application fraud occurs when a fraudulent transaction is carried out on an account where the card was acquired by falsifying a credit application

FALSE APPLICATION CARD FRAUD TREND

During 2016 gross fraud losses associated with transactions following a false application decreased by 743 from R72m to R19m and accounted for 05 of the overall credit card gross fraud losses This highlights even further decreases after the mitigation measures rolled out in 2014

Losses related to false applications accounted for 005 of the total gross fraud loss on debit cards The gross fraud losses associated with the transactions following a false application for a debit card account increased slightly from R128961 to R167 142 This calculates to an increase of 296 although the values are not so significant

The banking industry continuously evaluates fraud detection and prevention strategies to mitigate the risk associated with false application fraud and the benefits thereof have been renowned after 2015 and is still visible in 2016 Traditional identity fraud modus operandi remain prevalent and forged supporting documentation often accompany false applications for cards

False application credit card fraud (2010 to 2016) All figures in (R) Million

False application debit card fraud (2010 to 2016) All figures in (R) Million

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Verify all requests for personal information and only give it out when

there is a legitimate reason to do so

If you suspect any suspicious activity on your account or you receive a statement for

an account you did not open ensure that you contact your bank immediately

Personal information must not be shared on social media as criminals can obtain it

easily and use it fraudulently

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESFALSE APPLICATION CARD FRAUD

22

COUNTERFEIT CARD FRAUD DEFINITIONCounterfeit card fraud is perpetrated with a card that has been illegally manufactured using information stolen from the magnetic strip of a genuinely issued card In some instances lost andor stolen cards andor old cards are re-encoded with information stolen from a genuine card for purposes of committing counterfeit card fraud The information needed for a counterfeit card is usually stolen through card skimming

COUNTERFEIT CARD FRAUD TREND

Counterfeit credit card fraud decreased slightly by 003 in 2016 (from R9904m to R9902m) and contributed 264 of the overall credit card gross fraud loss Most of the counterfeit credit card losses (711) occurred inside South Africa The percentage of losses occurring outside South Africa decreased by 314 with the losses inside South Africa increasing by 228 during 2016 compared to 2015

The highest gross fraud losses in respect of counterfeit credit card fraud related to purchases at grocery stores cash withdrawals at ATMs purchases at department stores liquor stores and service stations

Counterfeit debit card fraud decreased by 350 in 2016 and the gross fraud loss decreased from R1359m in 2015 to R884 in 2016 Counterfeit debit card fraud accounted for 257 of the total gross fraud loss on debit cards The majority of these losses (741) occurred inside South Africa

The highest gross fraud losses related to counterfeit debit card fraud relate to purchases at grocery stores department store clothing and liquor stores followed by cash withdrawals

Although counterfeit card fraud is no longer the greatest fraud loss category it remains of concern as it stillaccounts for a large portion of the gross fraud losses Criminals are currently abusing the ldquofall backrdquo optionresulting in an increase seen in the number of transactions occurring inside South Africa and more so related to POStransactionsThis is particularly noteworthy in transactions related to credit cards

The skimming of cards to obtain card information remains a prevalent modus operandi irrespective of themethodology used be it with Point Of Sale (POS) ATM mounted or handheld skimming devices Card skimming involves the illegal copying of encoded information from the magnetic strip of a legitimate card by means of a card reader with the intention of using the data for encoding counterfeit lost or stolen cards to transactfraudulently

Counterfeit debit card fraud (2010 to 2016)All figures in (R) Million

Counterfeit credit card fraud (2010 to 2016)All figures in (R) Million

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

BREAKDOWN OF FRAUD TYPESCOUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

23

Criminals steal legitimate POS devices and then illegally convert them into skimming devices These POS skimming devices are used to skim bank card information of unsuspecting victims

POS skimming devices retrieved (2014 to 2016)

POINT OF SALE (POS) SKIMMING DEVICES

POS skimming devices were retrieved in South Africa for the first time in 2014 In 2016 a total of 30 POS skimming devices were recovered by the South African Police and bank investigators These devices were retrieved in Gauteng (22) and Western Cape (8) respectively

Provincial distribution of POS skimming devices retrieved during 2016

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

24

ATM MOUNTED SKIMMING DEVICES

For 2016 a total of 15 ATM mounted skimming devices were recovered by the banking industry and law enforcement

ATM mounted skimming devices were retrieved in Gauteng (7) Mpumalanga (6) and North West (2)

ATM mounted skimming devices retrieved (2010 to 2016) All figures in (R) Millions

Provincial distribution of ATM mounted skimming devices retrieved in 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

For 2016 a total of 15 ATM mounted skimming devices were recovered

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

25

ATM MOUNTED SKIMMING DEVICES

ATM clients are encouraged to lookout for foreign objects attached to ATMs and urged to always conceal their PIN when transacting

ATM mounted skimming devices are not easily recognisable as they are manufactured to match the look and feel of the ATM An increase in detection by consumers has however been noted and can be correlated to the consistent awareness created by the banking industry The vigilance of consumers is contributing positively to the detection of ATM mounted skimming devices

CARD SKIMMING WITH HANDHELD DEVICES

A total of 31 handheld skimming devices were recovered in 2016 by either the South African Police or bank investigators

Handheld skimming devices retrieved (2010 to 2016)

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Fitted ATM card reader

Pin hole camera

The camera captures the PIN and the ATM cardreader captures the card data

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

26

HANDHELD SKIMMING DEVICES

During 2016 the majority (19) of these devices were recovered in Gauteng Eight in KwaZulu Natal two in North West and one in Mpumalanga and Western Cape respectively

The images below are examples of handheld skimming devices Despite the exponential evolution of technology these devices have not changed much in recent years Criminals are still using handheld skimming devices that fit into the palm of your hand and can easily be concealed The public is urged to report any individuals known to be importing or using these devices to compromise card data to the South African Police

Provincial distribution of retrieved handheld skimming devices

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

Do not allow anyone to swipe your card on a small black device

unknown to you

1

Always cover the PIN Pad whenentering the card pin

3

If you are interfered with whilst transacting at an ATM your card may have been skimmed by being removed and replaced back into

the ATM without your knowledgebull Ensure that you cancel the transaction immediately

bull Report the incident using your bankrsquos Stop Card Toll free number

2

WiseUpWatchOut

COUNTERFEIT CARD FRAUD

27

ACCOUNT TAKEOVER CARD FRAUD DEFINITIONAccount takeover fraud takes place when an existing account is taken over by someone posing as the genuine account holder who then uses the account for their own benefit whilst pretending to be the genuine account holder The common denominator for both Account Takeover fraud and False Application fraud is the fraudstersrsquo access to the personal information of their victims by obtaining personal or client-specific information and pretending to be the client in order to apply for a replacement card which is then once received used fraudulently

ACCOUNT TAKEOVER CARD FRAUD TREND

Credit card gross fraud losses associated with account takeover fraud increased by 630 (from R18m in 2015 to R29m in 2016) Account takeover fraud accounted for 08 of the overall credit card losses

Debit card gross fraud losses associated with account takeover fraud increased by 496 (from R16m in 2015 to R24m in 2016) Account takeover fraud accounted for 07 of the total gross fraud loss on debit cards

These are substantial percentage increases and the fact that the losses are relatively low when compared to the other fraud types it should not be considered tolerable Monitoring is essential as the cards are in demand by the criminals since legitimate cards and PINs are obtained The rise in account takeover card fraud is in line with increasing identity theft trends

Account takeover credit card fraud (2010 to 2016) All figures in (R) Millions

Account takeover debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Only give out your bank card number or other sensitive information on calls that you initiate to

your bankrsquos customer service division

1

Avoid returning calls to a phone number left on your answering services rather contact the

bank via the numbers provided on the card or the website of the bank

3

Keep your transaction slips and check them against your statement to spot any suspicious transactions

which if found must be queried with your bank immediately

2

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESACCOUNT TAKEOVER CARD FRAUD

28

CARD NOT PRESENT FRAUD DEFINITIONCNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting transactions These transactions occur when retailers are unable to check the card or the identity of the cardholder and can be conducted under the following circumstances orders for goods placed telephonically purchases conducted via the internet by mail order or fax CNP fraud is generally concluded with fraudulently obtained card data and personal information and sourced by various means such as discarded receipts previous CNP purchases and phishing

CARD NOT PRESENT FRAUD TREND

Gross fraud losses for CNP credit card increased by 189 from R2104m in 2015 to R2500m in 2016 and contributed 668 of the total credit card gross fraud losses in 2016 This is the highest level of CNP fraud reported to SABRIC with the second highest being R2407m gross losses reported in 2014 A total of 651 of the gross fraud losses relates to transactions outside of South Africa with the remaining 349 having occurred at South African merchants

The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services including airline tickets travel agencies vehicle hire and hotel accommodation as well as direct marketing

During 2016 the gross fraud loss associated with CNP fraud on debit cards amounted to R577m and contributed 168 of the total gross fraud loss on debit cards CNP gross fraud losses increased from R551m in 2015 to R577m in 2016 The majority of these transactions (737) occurred at merchants outside of South Africa with the remaining 263 occurring at South African merchants

The highest gross fraud losses related to CNP debit card fraud was also linked to the travel industry and included ie airline tickets vehicle hire and hotel accommodation

The increase in CNP fraud is a trend noted in EMV compliant countries such as the UK and South Africa is following a similar pattern The implementation of 3D secure at many South African online merchants could be a contributing factor for the move towards the South African cards used at non-South African merchants CNP fraud on debit cards is expected to increase as CNP transactions are now allowed on debit cards

Criminals source data to perpetrate CNP fraud using various modus operandi including but not limited to phishing scams vishing malware and data breaches

CNP credit card fraud (2010 to 2016) All figures in (R) Millions

CNP debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Emails that quote card numbers and expiry dates should never be sent nor should this information be disclosed

telephonically

Ensure you only place orders with your card on a reputable and secure website

when shopping online

Ensure that your bankcards are registered for 3D Secure ndash contact your

bank for more information on 3D Secure registration

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESCARD NOT PRESENT FRAUD

011 847 3000wwwsabriccoza

SabricZA SabricZASabric

22

COUNTERFEIT CARD FRAUD DEFINITIONCounterfeit card fraud is perpetrated with a card that has been illegally manufactured using information stolen from the magnetic strip of a genuinely issued card In some instances lost andor stolen cards andor old cards are re-encoded with information stolen from a genuine card for purposes of committing counterfeit card fraud The information needed for a counterfeit card is usually stolen through card skimming

COUNTERFEIT CARD FRAUD TREND

Counterfeit credit card fraud decreased slightly by 003 in 2016 (from R9904m to R9902m) and contributed 264 of the overall credit card gross fraud loss Most of the counterfeit credit card losses (711) occurred inside South Africa The percentage of losses occurring outside South Africa decreased by 314 with the losses inside South Africa increasing by 228 during 2016 compared to 2015

The highest gross fraud losses in respect of counterfeit credit card fraud related to purchases at grocery stores cash withdrawals at ATMs purchases at department stores liquor stores and service stations

Counterfeit debit card fraud decreased by 350 in 2016 and the gross fraud loss decreased from R1359m in 2015 to R884 in 2016 Counterfeit debit card fraud accounted for 257 of the total gross fraud loss on debit cards The majority of these losses (741) occurred inside South Africa

The highest gross fraud losses related to counterfeit debit card fraud relate to purchases at grocery stores department store clothing and liquor stores followed by cash withdrawals

Although counterfeit card fraud is no longer the greatest fraud loss category it remains of concern as it stillaccounts for a large portion of the gross fraud losses Criminals are currently abusing the ldquofall backrdquo optionresulting in an increase seen in the number of transactions occurring inside South Africa and more so related to POStransactionsThis is particularly noteworthy in transactions related to credit cards

The skimming of cards to obtain card information remains a prevalent modus operandi irrespective of themethodology used be it with Point Of Sale (POS) ATM mounted or handheld skimming devices Card skimming involves the illegal copying of encoded information from the magnetic strip of a legitimate card by means of a card reader with the intention of using the data for encoding counterfeit lost or stolen cards to transactfraudulently

Counterfeit debit card fraud (2010 to 2016)All figures in (R) Million

Counterfeit credit card fraud (2010 to 2016)All figures in (R) Million

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

BREAKDOWN OF FRAUD TYPESCOUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

23

Criminals steal legitimate POS devices and then illegally convert them into skimming devices These POS skimming devices are used to skim bank card information of unsuspecting victims

POS skimming devices retrieved (2014 to 2016)

POINT OF SALE (POS) SKIMMING DEVICES

POS skimming devices were retrieved in South Africa for the first time in 2014 In 2016 a total of 30 POS skimming devices were recovered by the South African Police and bank investigators These devices were retrieved in Gauteng (22) and Western Cape (8) respectively

Provincial distribution of POS skimming devices retrieved during 2016

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

24

ATM MOUNTED SKIMMING DEVICES

For 2016 a total of 15 ATM mounted skimming devices were recovered by the banking industry and law enforcement

ATM mounted skimming devices were retrieved in Gauteng (7) Mpumalanga (6) and North West (2)

ATM mounted skimming devices retrieved (2010 to 2016) All figures in (R) Millions

Provincial distribution of ATM mounted skimming devices retrieved in 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

For 2016 a total of 15 ATM mounted skimming devices were recovered

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

25

ATM MOUNTED SKIMMING DEVICES

ATM clients are encouraged to lookout for foreign objects attached to ATMs and urged to always conceal their PIN when transacting

ATM mounted skimming devices are not easily recognisable as they are manufactured to match the look and feel of the ATM An increase in detection by consumers has however been noted and can be correlated to the consistent awareness created by the banking industry The vigilance of consumers is contributing positively to the detection of ATM mounted skimming devices

CARD SKIMMING WITH HANDHELD DEVICES

A total of 31 handheld skimming devices were recovered in 2016 by either the South African Police or bank investigators

Handheld skimming devices retrieved (2010 to 2016)

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Fitted ATM card reader

Pin hole camera

The camera captures the PIN and the ATM cardreader captures the card data

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

26

HANDHELD SKIMMING DEVICES

During 2016 the majority (19) of these devices were recovered in Gauteng Eight in KwaZulu Natal two in North West and one in Mpumalanga and Western Cape respectively

The images below are examples of handheld skimming devices Despite the exponential evolution of technology these devices have not changed much in recent years Criminals are still using handheld skimming devices that fit into the palm of your hand and can easily be concealed The public is urged to report any individuals known to be importing or using these devices to compromise card data to the South African Police

Provincial distribution of retrieved handheld skimming devices

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

Do not allow anyone to swipe your card on a small black device

unknown to you

1

Always cover the PIN Pad whenentering the card pin

3

If you are interfered with whilst transacting at an ATM your card may have been skimmed by being removed and replaced back into

the ATM without your knowledgebull Ensure that you cancel the transaction immediately

bull Report the incident using your bankrsquos Stop Card Toll free number

2

WiseUpWatchOut

COUNTERFEIT CARD FRAUD

27

ACCOUNT TAKEOVER CARD FRAUD DEFINITIONAccount takeover fraud takes place when an existing account is taken over by someone posing as the genuine account holder who then uses the account for their own benefit whilst pretending to be the genuine account holder The common denominator for both Account Takeover fraud and False Application fraud is the fraudstersrsquo access to the personal information of their victims by obtaining personal or client-specific information and pretending to be the client in order to apply for a replacement card which is then once received used fraudulently

ACCOUNT TAKEOVER CARD FRAUD TREND

Credit card gross fraud losses associated with account takeover fraud increased by 630 (from R18m in 2015 to R29m in 2016) Account takeover fraud accounted for 08 of the overall credit card losses

Debit card gross fraud losses associated with account takeover fraud increased by 496 (from R16m in 2015 to R24m in 2016) Account takeover fraud accounted for 07 of the total gross fraud loss on debit cards

These are substantial percentage increases and the fact that the losses are relatively low when compared to the other fraud types it should not be considered tolerable Monitoring is essential as the cards are in demand by the criminals since legitimate cards and PINs are obtained The rise in account takeover card fraud is in line with increasing identity theft trends

Account takeover credit card fraud (2010 to 2016) All figures in (R) Millions

Account takeover debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Only give out your bank card number or other sensitive information on calls that you initiate to

your bankrsquos customer service division

1

Avoid returning calls to a phone number left on your answering services rather contact the

bank via the numbers provided on the card or the website of the bank

3

Keep your transaction slips and check them against your statement to spot any suspicious transactions

which if found must be queried with your bank immediately

2

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESACCOUNT TAKEOVER CARD FRAUD

28

CARD NOT PRESENT FRAUD DEFINITIONCNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting transactions These transactions occur when retailers are unable to check the card or the identity of the cardholder and can be conducted under the following circumstances orders for goods placed telephonically purchases conducted via the internet by mail order or fax CNP fraud is generally concluded with fraudulently obtained card data and personal information and sourced by various means such as discarded receipts previous CNP purchases and phishing

CARD NOT PRESENT FRAUD TREND

Gross fraud losses for CNP credit card increased by 189 from R2104m in 2015 to R2500m in 2016 and contributed 668 of the total credit card gross fraud losses in 2016 This is the highest level of CNP fraud reported to SABRIC with the second highest being R2407m gross losses reported in 2014 A total of 651 of the gross fraud losses relates to transactions outside of South Africa with the remaining 349 having occurred at South African merchants

The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services including airline tickets travel agencies vehicle hire and hotel accommodation as well as direct marketing

During 2016 the gross fraud loss associated with CNP fraud on debit cards amounted to R577m and contributed 168 of the total gross fraud loss on debit cards CNP gross fraud losses increased from R551m in 2015 to R577m in 2016 The majority of these transactions (737) occurred at merchants outside of South Africa with the remaining 263 occurring at South African merchants

The highest gross fraud losses related to CNP debit card fraud was also linked to the travel industry and included ie airline tickets vehicle hire and hotel accommodation

The increase in CNP fraud is a trend noted in EMV compliant countries such as the UK and South Africa is following a similar pattern The implementation of 3D secure at many South African online merchants could be a contributing factor for the move towards the South African cards used at non-South African merchants CNP fraud on debit cards is expected to increase as CNP transactions are now allowed on debit cards

Criminals source data to perpetrate CNP fraud using various modus operandi including but not limited to phishing scams vishing malware and data breaches

CNP credit card fraud (2010 to 2016) All figures in (R) Millions

CNP debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Emails that quote card numbers and expiry dates should never be sent nor should this information be disclosed

telephonically

Ensure you only place orders with your card on a reputable and secure website

when shopping online

Ensure that your bankcards are registered for 3D Secure ndash contact your

bank for more information on 3D Secure registration

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESCARD NOT PRESENT FRAUD

011 847 3000wwwsabriccoza

SabricZA SabricZASabric

BREAKDOWN OF FRAUD TYPES

23

Criminals steal legitimate POS devices and then illegally convert them into skimming devices These POS skimming devices are used to skim bank card information of unsuspecting victims

POS skimming devices retrieved (2014 to 2016)

POINT OF SALE (POS) SKIMMING DEVICES

POS skimming devices were retrieved in South Africa for the first time in 2014 In 2016 a total of 30 POS skimming devices were recovered by the South African Police and bank investigators These devices were retrieved in Gauteng (22) and Western Cape (8) respectively

Provincial distribution of POS skimming devices retrieved during 2016

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

24

ATM MOUNTED SKIMMING DEVICES

For 2016 a total of 15 ATM mounted skimming devices were recovered by the banking industry and law enforcement

ATM mounted skimming devices were retrieved in Gauteng (7) Mpumalanga (6) and North West (2)

ATM mounted skimming devices retrieved (2010 to 2016) All figures in (R) Millions

Provincial distribution of ATM mounted skimming devices retrieved in 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

For 2016 a total of 15 ATM mounted skimming devices were recovered

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

25

ATM MOUNTED SKIMMING DEVICES

ATM clients are encouraged to lookout for foreign objects attached to ATMs and urged to always conceal their PIN when transacting

ATM mounted skimming devices are not easily recognisable as they are manufactured to match the look and feel of the ATM An increase in detection by consumers has however been noted and can be correlated to the consistent awareness created by the banking industry The vigilance of consumers is contributing positively to the detection of ATM mounted skimming devices

CARD SKIMMING WITH HANDHELD DEVICES

A total of 31 handheld skimming devices were recovered in 2016 by either the South African Police or bank investigators

Handheld skimming devices retrieved (2010 to 2016)

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Fitted ATM card reader

Pin hole camera

The camera captures the PIN and the ATM cardreader captures the card data

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

26

HANDHELD SKIMMING DEVICES

During 2016 the majority (19) of these devices were recovered in Gauteng Eight in KwaZulu Natal two in North West and one in Mpumalanga and Western Cape respectively

The images below are examples of handheld skimming devices Despite the exponential evolution of technology these devices have not changed much in recent years Criminals are still using handheld skimming devices that fit into the palm of your hand and can easily be concealed The public is urged to report any individuals known to be importing or using these devices to compromise card data to the South African Police

Provincial distribution of retrieved handheld skimming devices

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

Do not allow anyone to swipe your card on a small black device

unknown to you

1

Always cover the PIN Pad whenentering the card pin

3

If you are interfered with whilst transacting at an ATM your card may have been skimmed by being removed and replaced back into

the ATM without your knowledgebull Ensure that you cancel the transaction immediately

bull Report the incident using your bankrsquos Stop Card Toll free number

2

WiseUpWatchOut

COUNTERFEIT CARD FRAUD

27

ACCOUNT TAKEOVER CARD FRAUD DEFINITIONAccount takeover fraud takes place when an existing account is taken over by someone posing as the genuine account holder who then uses the account for their own benefit whilst pretending to be the genuine account holder The common denominator for both Account Takeover fraud and False Application fraud is the fraudstersrsquo access to the personal information of their victims by obtaining personal or client-specific information and pretending to be the client in order to apply for a replacement card which is then once received used fraudulently

ACCOUNT TAKEOVER CARD FRAUD TREND

Credit card gross fraud losses associated with account takeover fraud increased by 630 (from R18m in 2015 to R29m in 2016) Account takeover fraud accounted for 08 of the overall credit card losses

Debit card gross fraud losses associated with account takeover fraud increased by 496 (from R16m in 2015 to R24m in 2016) Account takeover fraud accounted for 07 of the total gross fraud loss on debit cards

These are substantial percentage increases and the fact that the losses are relatively low when compared to the other fraud types it should not be considered tolerable Monitoring is essential as the cards are in demand by the criminals since legitimate cards and PINs are obtained The rise in account takeover card fraud is in line with increasing identity theft trends

Account takeover credit card fraud (2010 to 2016) All figures in (R) Millions

Account takeover debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Only give out your bank card number or other sensitive information on calls that you initiate to

your bankrsquos customer service division

1

Avoid returning calls to a phone number left on your answering services rather contact the

bank via the numbers provided on the card or the website of the bank

3

Keep your transaction slips and check them against your statement to spot any suspicious transactions

which if found must be queried with your bank immediately

2

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESACCOUNT TAKEOVER CARD FRAUD

28

CARD NOT PRESENT FRAUD DEFINITIONCNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting transactions These transactions occur when retailers are unable to check the card or the identity of the cardholder and can be conducted under the following circumstances orders for goods placed telephonically purchases conducted via the internet by mail order or fax CNP fraud is generally concluded with fraudulently obtained card data and personal information and sourced by various means such as discarded receipts previous CNP purchases and phishing

CARD NOT PRESENT FRAUD TREND

Gross fraud losses for CNP credit card increased by 189 from R2104m in 2015 to R2500m in 2016 and contributed 668 of the total credit card gross fraud losses in 2016 This is the highest level of CNP fraud reported to SABRIC with the second highest being R2407m gross losses reported in 2014 A total of 651 of the gross fraud losses relates to transactions outside of South Africa with the remaining 349 having occurred at South African merchants

The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services including airline tickets travel agencies vehicle hire and hotel accommodation as well as direct marketing

During 2016 the gross fraud loss associated with CNP fraud on debit cards amounted to R577m and contributed 168 of the total gross fraud loss on debit cards CNP gross fraud losses increased from R551m in 2015 to R577m in 2016 The majority of these transactions (737) occurred at merchants outside of South Africa with the remaining 263 occurring at South African merchants

The highest gross fraud losses related to CNP debit card fraud was also linked to the travel industry and included ie airline tickets vehicle hire and hotel accommodation

The increase in CNP fraud is a trend noted in EMV compliant countries such as the UK and South Africa is following a similar pattern The implementation of 3D secure at many South African online merchants could be a contributing factor for the move towards the South African cards used at non-South African merchants CNP fraud on debit cards is expected to increase as CNP transactions are now allowed on debit cards

Criminals source data to perpetrate CNP fraud using various modus operandi including but not limited to phishing scams vishing malware and data breaches

CNP credit card fraud (2010 to 2016) All figures in (R) Millions

CNP debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Emails that quote card numbers and expiry dates should never be sent nor should this information be disclosed

telephonically

Ensure you only place orders with your card on a reputable and secure website

when shopping online

Ensure that your bankcards are registered for 3D Secure ndash contact your

bank for more information on 3D Secure registration

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESCARD NOT PRESENT FRAUD

011 847 3000wwwsabriccoza

SabricZA SabricZASabric

BREAKDOWN OF FRAUD TYPES

24

ATM MOUNTED SKIMMING DEVICES

For 2016 a total of 15 ATM mounted skimming devices were recovered by the banking industry and law enforcement

ATM mounted skimming devices were retrieved in Gauteng (7) Mpumalanga (6) and North West (2)

ATM mounted skimming devices retrieved (2010 to 2016) All figures in (R) Millions

Provincial distribution of ATM mounted skimming devices retrieved in 2016

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

For 2016 a total of 15 ATM mounted skimming devices were recovered

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

25

ATM MOUNTED SKIMMING DEVICES

ATM clients are encouraged to lookout for foreign objects attached to ATMs and urged to always conceal their PIN when transacting

ATM mounted skimming devices are not easily recognisable as they are manufactured to match the look and feel of the ATM An increase in detection by consumers has however been noted and can be correlated to the consistent awareness created by the banking industry The vigilance of consumers is contributing positively to the detection of ATM mounted skimming devices

CARD SKIMMING WITH HANDHELD DEVICES

A total of 31 handheld skimming devices were recovered in 2016 by either the South African Police or bank investigators

Handheld skimming devices retrieved (2010 to 2016)

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Fitted ATM card reader

Pin hole camera

The camera captures the PIN and the ATM cardreader captures the card data

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

26

HANDHELD SKIMMING DEVICES

During 2016 the majority (19) of these devices were recovered in Gauteng Eight in KwaZulu Natal two in North West and one in Mpumalanga and Western Cape respectively

The images below are examples of handheld skimming devices Despite the exponential evolution of technology these devices have not changed much in recent years Criminals are still using handheld skimming devices that fit into the palm of your hand and can easily be concealed The public is urged to report any individuals known to be importing or using these devices to compromise card data to the South African Police

Provincial distribution of retrieved handheld skimming devices

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

Do not allow anyone to swipe your card on a small black device

unknown to you

1

Always cover the PIN Pad whenentering the card pin

3

If you are interfered with whilst transacting at an ATM your card may have been skimmed by being removed and replaced back into

the ATM without your knowledgebull Ensure that you cancel the transaction immediately

bull Report the incident using your bankrsquos Stop Card Toll free number

2

WiseUpWatchOut

COUNTERFEIT CARD FRAUD

27

ACCOUNT TAKEOVER CARD FRAUD DEFINITIONAccount takeover fraud takes place when an existing account is taken over by someone posing as the genuine account holder who then uses the account for their own benefit whilst pretending to be the genuine account holder The common denominator for both Account Takeover fraud and False Application fraud is the fraudstersrsquo access to the personal information of their victims by obtaining personal or client-specific information and pretending to be the client in order to apply for a replacement card which is then once received used fraudulently

ACCOUNT TAKEOVER CARD FRAUD TREND

Credit card gross fraud losses associated with account takeover fraud increased by 630 (from R18m in 2015 to R29m in 2016) Account takeover fraud accounted for 08 of the overall credit card losses

Debit card gross fraud losses associated with account takeover fraud increased by 496 (from R16m in 2015 to R24m in 2016) Account takeover fraud accounted for 07 of the total gross fraud loss on debit cards

These are substantial percentage increases and the fact that the losses are relatively low when compared to the other fraud types it should not be considered tolerable Monitoring is essential as the cards are in demand by the criminals since legitimate cards and PINs are obtained The rise in account takeover card fraud is in line with increasing identity theft trends

Account takeover credit card fraud (2010 to 2016) All figures in (R) Millions

Account takeover debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Only give out your bank card number or other sensitive information on calls that you initiate to

your bankrsquos customer service division

1

Avoid returning calls to a phone number left on your answering services rather contact the

bank via the numbers provided on the card or the website of the bank

3

Keep your transaction slips and check them against your statement to spot any suspicious transactions

which if found must be queried with your bank immediately

2

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESACCOUNT TAKEOVER CARD FRAUD

28

CARD NOT PRESENT FRAUD DEFINITIONCNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting transactions These transactions occur when retailers are unable to check the card or the identity of the cardholder and can be conducted under the following circumstances orders for goods placed telephonically purchases conducted via the internet by mail order or fax CNP fraud is generally concluded with fraudulently obtained card data and personal information and sourced by various means such as discarded receipts previous CNP purchases and phishing

CARD NOT PRESENT FRAUD TREND

Gross fraud losses for CNP credit card increased by 189 from R2104m in 2015 to R2500m in 2016 and contributed 668 of the total credit card gross fraud losses in 2016 This is the highest level of CNP fraud reported to SABRIC with the second highest being R2407m gross losses reported in 2014 A total of 651 of the gross fraud losses relates to transactions outside of South Africa with the remaining 349 having occurred at South African merchants

The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services including airline tickets travel agencies vehicle hire and hotel accommodation as well as direct marketing

During 2016 the gross fraud loss associated with CNP fraud on debit cards amounted to R577m and contributed 168 of the total gross fraud loss on debit cards CNP gross fraud losses increased from R551m in 2015 to R577m in 2016 The majority of these transactions (737) occurred at merchants outside of South Africa with the remaining 263 occurring at South African merchants

The highest gross fraud losses related to CNP debit card fraud was also linked to the travel industry and included ie airline tickets vehicle hire and hotel accommodation

The increase in CNP fraud is a trend noted in EMV compliant countries such as the UK and South Africa is following a similar pattern The implementation of 3D secure at many South African online merchants could be a contributing factor for the move towards the South African cards used at non-South African merchants CNP fraud on debit cards is expected to increase as CNP transactions are now allowed on debit cards

Criminals source data to perpetrate CNP fraud using various modus operandi including but not limited to phishing scams vishing malware and data breaches

CNP credit card fraud (2010 to 2016) All figures in (R) Millions

CNP debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Emails that quote card numbers and expiry dates should never be sent nor should this information be disclosed

telephonically

Ensure you only place orders with your card on a reputable and secure website

when shopping online

Ensure that your bankcards are registered for 3D Secure ndash contact your

bank for more information on 3D Secure registration

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESCARD NOT PRESENT FRAUD

011 847 3000wwwsabriccoza

SabricZA SabricZASabric

BREAKDOWN OF FRAUD TYPES

25

ATM MOUNTED SKIMMING DEVICES

ATM clients are encouraged to lookout for foreign objects attached to ATMs and urged to always conceal their PIN when transacting

ATM mounted skimming devices are not easily recognisable as they are manufactured to match the look and feel of the ATM An increase in detection by consumers has however been noted and can be correlated to the consistent awareness created by the banking industry The vigilance of consumers is contributing positively to the detection of ATM mounted skimming devices

CARD SKIMMING WITH HANDHELD DEVICES

A total of 31 handheld skimming devices were recovered in 2016 by either the South African Police or bank investigators

Handheld skimming devices retrieved (2010 to 2016)

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Fitted ATM card reader

Pin hole camera

The camera captures the PIN and the ATM cardreader captures the card data

COUNTERFEIT CARD FRAUD

BREAKDOWN OF FRAUD TYPES

26

HANDHELD SKIMMING DEVICES

During 2016 the majority (19) of these devices were recovered in Gauteng Eight in KwaZulu Natal two in North West and one in Mpumalanga and Western Cape respectively

The images below are examples of handheld skimming devices Despite the exponential evolution of technology these devices have not changed much in recent years Criminals are still using handheld skimming devices that fit into the palm of your hand and can easily be concealed The public is urged to report any individuals known to be importing or using these devices to compromise card data to the South African Police

Provincial distribution of retrieved handheld skimming devices

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

Do not allow anyone to swipe your card on a small black device

unknown to you

1

Always cover the PIN Pad whenentering the card pin

3

If you are interfered with whilst transacting at an ATM your card may have been skimmed by being removed and replaced back into

the ATM without your knowledgebull Ensure that you cancel the transaction immediately

bull Report the incident using your bankrsquos Stop Card Toll free number

2

WiseUpWatchOut

COUNTERFEIT CARD FRAUD

27

ACCOUNT TAKEOVER CARD FRAUD DEFINITIONAccount takeover fraud takes place when an existing account is taken over by someone posing as the genuine account holder who then uses the account for their own benefit whilst pretending to be the genuine account holder The common denominator for both Account Takeover fraud and False Application fraud is the fraudstersrsquo access to the personal information of their victims by obtaining personal or client-specific information and pretending to be the client in order to apply for a replacement card which is then once received used fraudulently

ACCOUNT TAKEOVER CARD FRAUD TREND

Credit card gross fraud losses associated with account takeover fraud increased by 630 (from R18m in 2015 to R29m in 2016) Account takeover fraud accounted for 08 of the overall credit card losses

Debit card gross fraud losses associated with account takeover fraud increased by 496 (from R16m in 2015 to R24m in 2016) Account takeover fraud accounted for 07 of the total gross fraud loss on debit cards

These are substantial percentage increases and the fact that the losses are relatively low when compared to the other fraud types it should not be considered tolerable Monitoring is essential as the cards are in demand by the criminals since legitimate cards and PINs are obtained The rise in account takeover card fraud is in line with increasing identity theft trends

Account takeover credit card fraud (2010 to 2016) All figures in (R) Millions

Account takeover debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Only give out your bank card number or other sensitive information on calls that you initiate to

your bankrsquos customer service division

1

Avoid returning calls to a phone number left on your answering services rather contact the

bank via the numbers provided on the card or the website of the bank

3

Keep your transaction slips and check them against your statement to spot any suspicious transactions

which if found must be queried with your bank immediately

2

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESACCOUNT TAKEOVER CARD FRAUD

28

CARD NOT PRESENT FRAUD DEFINITIONCNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting transactions These transactions occur when retailers are unable to check the card or the identity of the cardholder and can be conducted under the following circumstances orders for goods placed telephonically purchases conducted via the internet by mail order or fax CNP fraud is generally concluded with fraudulently obtained card data and personal information and sourced by various means such as discarded receipts previous CNP purchases and phishing

CARD NOT PRESENT FRAUD TREND

Gross fraud losses for CNP credit card increased by 189 from R2104m in 2015 to R2500m in 2016 and contributed 668 of the total credit card gross fraud losses in 2016 This is the highest level of CNP fraud reported to SABRIC with the second highest being R2407m gross losses reported in 2014 A total of 651 of the gross fraud losses relates to transactions outside of South Africa with the remaining 349 having occurred at South African merchants

The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services including airline tickets travel agencies vehicle hire and hotel accommodation as well as direct marketing

During 2016 the gross fraud loss associated with CNP fraud on debit cards amounted to R577m and contributed 168 of the total gross fraud loss on debit cards CNP gross fraud losses increased from R551m in 2015 to R577m in 2016 The majority of these transactions (737) occurred at merchants outside of South Africa with the remaining 263 occurring at South African merchants

The highest gross fraud losses related to CNP debit card fraud was also linked to the travel industry and included ie airline tickets vehicle hire and hotel accommodation

The increase in CNP fraud is a trend noted in EMV compliant countries such as the UK and South Africa is following a similar pattern The implementation of 3D secure at many South African online merchants could be a contributing factor for the move towards the South African cards used at non-South African merchants CNP fraud on debit cards is expected to increase as CNP transactions are now allowed on debit cards

Criminals source data to perpetrate CNP fraud using various modus operandi including but not limited to phishing scams vishing malware and data breaches

CNP credit card fraud (2010 to 2016) All figures in (R) Millions

CNP debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Emails that quote card numbers and expiry dates should never be sent nor should this information be disclosed

telephonically

Ensure you only place orders with your card on a reputable and secure website

when shopping online

Ensure that your bankcards are registered for 3D Secure ndash contact your

bank for more information on 3D Secure registration

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESCARD NOT PRESENT FRAUD

011 847 3000wwwsabriccoza

SabricZA SabricZASabric

BREAKDOWN OF FRAUD TYPES

26

HANDHELD SKIMMING DEVICES

During 2016 the majority (19) of these devices were recovered in Gauteng Eight in KwaZulu Natal two in North West and one in Mpumalanga and Western Cape respectively

The images below are examples of handheld skimming devices Despite the exponential evolution of technology these devices have not changed much in recent years Criminals are still using handheld skimming devices that fit into the palm of your hand and can easily be concealed The public is urged to report any individuals known to be importing or using these devices to compromise card data to the South African Police

Provincial distribution of retrieved handheld skimming devices

LostampStolen

NRI

2014

2015

2016

CNP

42

08

49

30

30

668

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

42

08

05

264

08

668

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

54

08

572

127

24

35

02

18

161

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

55

16

555

153

17

44

08

30

121

Eastern Cape

Free State

Gauteng

KwaZulu Natal

Limpopo

Mpumalanga

Northern Cape

North West

Western Cape

99

45

348

174

39

65

15

73

88

ATM

Other

3

97

ATM

Other

52

48

Western Cape

Gauteng

8

22

LostampStolen

NRI

FalseApp

Counterfeit

TakeOver

CNP

562

05

005

257

07

168

19

8

1

2

1

Do not allow anyone to swipe your card on a small black device

unknown to you

1

Always cover the PIN Pad whenentering the card pin

3

If you are interfered with whilst transacting at an ATM your card may have been skimmed by being removed and replaced back into

the ATM without your knowledgebull Ensure that you cancel the transaction immediately

bull Report the incident using your bankrsquos Stop Card Toll free number

2

WiseUpWatchOut

COUNTERFEIT CARD FRAUD

27

ACCOUNT TAKEOVER CARD FRAUD DEFINITIONAccount takeover fraud takes place when an existing account is taken over by someone posing as the genuine account holder who then uses the account for their own benefit whilst pretending to be the genuine account holder The common denominator for both Account Takeover fraud and False Application fraud is the fraudstersrsquo access to the personal information of their victims by obtaining personal or client-specific information and pretending to be the client in order to apply for a replacement card which is then once received used fraudulently

ACCOUNT TAKEOVER CARD FRAUD TREND

Credit card gross fraud losses associated with account takeover fraud increased by 630 (from R18m in 2015 to R29m in 2016) Account takeover fraud accounted for 08 of the overall credit card losses

Debit card gross fraud losses associated with account takeover fraud increased by 496 (from R16m in 2015 to R24m in 2016) Account takeover fraud accounted for 07 of the total gross fraud loss on debit cards

These are substantial percentage increases and the fact that the losses are relatively low when compared to the other fraud types it should not be considered tolerable Monitoring is essential as the cards are in demand by the criminals since legitimate cards and PINs are obtained The rise in account takeover card fraud is in line with increasing identity theft trends

Account takeover credit card fraud (2010 to 2016) All figures in (R) Millions

Account takeover debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Only give out your bank card number or other sensitive information on calls that you initiate to

your bankrsquos customer service division

1

Avoid returning calls to a phone number left on your answering services rather contact the

bank via the numbers provided on the card or the website of the bank

3

Keep your transaction slips and check them against your statement to spot any suspicious transactions

which if found must be queried with your bank immediately

2

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESACCOUNT TAKEOVER CARD FRAUD

28

CARD NOT PRESENT FRAUD DEFINITIONCNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting transactions These transactions occur when retailers are unable to check the card or the identity of the cardholder and can be conducted under the following circumstances orders for goods placed telephonically purchases conducted via the internet by mail order or fax CNP fraud is generally concluded with fraudulently obtained card data and personal information and sourced by various means such as discarded receipts previous CNP purchases and phishing

CARD NOT PRESENT FRAUD TREND

Gross fraud losses for CNP credit card increased by 189 from R2104m in 2015 to R2500m in 2016 and contributed 668 of the total credit card gross fraud losses in 2016 This is the highest level of CNP fraud reported to SABRIC with the second highest being R2407m gross losses reported in 2014 A total of 651 of the gross fraud losses relates to transactions outside of South Africa with the remaining 349 having occurred at South African merchants

The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services including airline tickets travel agencies vehicle hire and hotel accommodation as well as direct marketing

During 2016 the gross fraud loss associated with CNP fraud on debit cards amounted to R577m and contributed 168 of the total gross fraud loss on debit cards CNP gross fraud losses increased from R551m in 2015 to R577m in 2016 The majority of these transactions (737) occurred at merchants outside of South Africa with the remaining 263 occurring at South African merchants

The highest gross fraud losses related to CNP debit card fraud was also linked to the travel industry and included ie airline tickets vehicle hire and hotel accommodation

The increase in CNP fraud is a trend noted in EMV compliant countries such as the UK and South Africa is following a similar pattern The implementation of 3D secure at many South African online merchants could be a contributing factor for the move towards the South African cards used at non-South African merchants CNP fraud on debit cards is expected to increase as CNP transactions are now allowed on debit cards

Criminals source data to perpetrate CNP fraud using various modus operandi including but not limited to phishing scams vishing malware and data breaches

CNP credit card fraud (2010 to 2016) All figures in (R) Millions

CNP debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Emails that quote card numbers and expiry dates should never be sent nor should this information be disclosed

telephonically

Ensure you only place orders with your card on a reputable and secure website

when shopping online

Ensure that your bankcards are registered for 3D Secure ndash contact your

bank for more information on 3D Secure registration

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESCARD NOT PRESENT FRAUD

011 847 3000wwwsabriccoza

SabricZA SabricZASabric

27

ACCOUNT TAKEOVER CARD FRAUD DEFINITIONAccount takeover fraud takes place when an existing account is taken over by someone posing as the genuine account holder who then uses the account for their own benefit whilst pretending to be the genuine account holder The common denominator for both Account Takeover fraud and False Application fraud is the fraudstersrsquo access to the personal information of their victims by obtaining personal or client-specific information and pretending to be the client in order to apply for a replacement card which is then once received used fraudulently

ACCOUNT TAKEOVER CARD FRAUD TREND

Credit card gross fraud losses associated with account takeover fraud increased by 630 (from R18m in 2015 to R29m in 2016) Account takeover fraud accounted for 08 of the overall credit card losses

Debit card gross fraud losses associated with account takeover fraud increased by 496 (from R16m in 2015 to R24m in 2016) Account takeover fraud accounted for 07 of the total gross fraud loss on debit cards

These are substantial percentage increases and the fact that the losses are relatively low when compared to the other fraud types it should not be considered tolerable Monitoring is essential as the cards are in demand by the criminals since legitimate cards and PINs are obtained The rise in account takeover card fraud is in line with increasing identity theft trends

Account takeover credit card fraud (2010 to 2016) All figures in (R) Millions

Account takeover debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Only give out your bank card number or other sensitive information on calls that you initiate to

your bankrsquos customer service division

1

Avoid returning calls to a phone number left on your answering services rather contact the

bank via the numbers provided on the card or the website of the bank

3

Keep your transaction slips and check them against your statement to spot any suspicious transactions

which if found must be queried with your bank immediately

2

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESACCOUNT TAKEOVER CARD FRAUD

28

CARD NOT PRESENT FRAUD DEFINITIONCNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting transactions These transactions occur when retailers are unable to check the card or the identity of the cardholder and can be conducted under the following circumstances orders for goods placed telephonically purchases conducted via the internet by mail order or fax CNP fraud is generally concluded with fraudulently obtained card data and personal information and sourced by various means such as discarded receipts previous CNP purchases and phishing

CARD NOT PRESENT FRAUD TREND

Gross fraud losses for CNP credit card increased by 189 from R2104m in 2015 to R2500m in 2016 and contributed 668 of the total credit card gross fraud losses in 2016 This is the highest level of CNP fraud reported to SABRIC with the second highest being R2407m gross losses reported in 2014 A total of 651 of the gross fraud losses relates to transactions outside of South Africa with the remaining 349 having occurred at South African merchants

The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services including airline tickets travel agencies vehicle hire and hotel accommodation as well as direct marketing

During 2016 the gross fraud loss associated with CNP fraud on debit cards amounted to R577m and contributed 168 of the total gross fraud loss on debit cards CNP gross fraud losses increased from R551m in 2015 to R577m in 2016 The majority of these transactions (737) occurred at merchants outside of South Africa with the remaining 263 occurring at South African merchants

The highest gross fraud losses related to CNP debit card fraud was also linked to the travel industry and included ie airline tickets vehicle hire and hotel accommodation

The increase in CNP fraud is a trend noted in EMV compliant countries such as the UK and South Africa is following a similar pattern The implementation of 3D secure at many South African online merchants could be a contributing factor for the move towards the South African cards used at non-South African merchants CNP fraud on debit cards is expected to increase as CNP transactions are now allowed on debit cards

Criminals source data to perpetrate CNP fraud using various modus operandi including but not limited to phishing scams vishing malware and data breaches

CNP credit card fraud (2010 to 2016) All figures in (R) Millions

CNP debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Emails that quote card numbers and expiry dates should never be sent nor should this information be disclosed

telephonically

Ensure you only place orders with your card on a reputable and secure website

when shopping online

Ensure that your bankcards are registered for 3D Secure ndash contact your

bank for more information on 3D Secure registration

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESCARD NOT PRESENT FRAUD

011 847 3000wwwsabriccoza

SabricZA SabricZASabric

28

CARD NOT PRESENT FRAUD DEFINITIONCNP fraud is a fraudulent transaction where neither the card nor the cardholder is present whilst conducting transactions These transactions occur when retailers are unable to check the card or the identity of the cardholder and can be conducted under the following circumstances orders for goods placed telephonically purchases conducted via the internet by mail order or fax CNP fraud is generally concluded with fraudulently obtained card data and personal information and sourced by various means such as discarded receipts previous CNP purchases and phishing

CARD NOT PRESENT FRAUD TREND

Gross fraud losses for CNP credit card increased by 189 from R2104m in 2015 to R2500m in 2016 and contributed 668 of the total credit card gross fraud losses in 2016 This is the highest level of CNP fraud reported to SABRIC with the second highest being R2407m gross losses reported in 2014 A total of 651 of the gross fraud losses relates to transactions outside of South Africa with the remaining 349 having occurred at South African merchants

The highest gross fraud losses regarding CNP credit card fraud were in respect of tourism and hospitality services including airline tickets travel agencies vehicle hire and hotel accommodation as well as direct marketing

During 2016 the gross fraud loss associated with CNP fraud on debit cards amounted to R577m and contributed 168 of the total gross fraud loss on debit cards CNP gross fraud losses increased from R551m in 2015 to R577m in 2016 The majority of these transactions (737) occurred at merchants outside of South Africa with the remaining 263 occurring at South African merchants

The highest gross fraud losses related to CNP debit card fraud was also linked to the travel industry and included ie airline tickets vehicle hire and hotel accommodation

The increase in CNP fraud is a trend noted in EMV compliant countries such as the UK and South Africa is following a similar pattern The implementation of 3D secure at many South African online merchants could be a contributing factor for the move towards the South African cards used at non-South African merchants CNP fraud on debit cards is expected to increase as CNP transactions are now allowed on debit cards

Criminals source data to perpetrate CNP fraud using various modus operandi including but not limited to phishing scams vishing malware and data breaches

CNP credit card fraud (2010 to 2016) All figures in (R) Millions

CNP debit card fraud (2010 to 2016) All figures in (R) Millions

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

0 10 20 30 40 50 60 70 80 90 100

2016

2015

2014

2013

2012

2011

2010

0 01 02 03 04 05 06 07 08

2016

2015

2014

2013

2012

2011

2010 02

02

07

06

06

01

02

0

20

40

60

80

100

120

140

160

180

200

20162015201420132012201120100

40

80

120

160

200

240

280

320

360

400

2016201520142013201220112010

2024

3645

2869

2114

1558

136

884

815

1887

2138

2389

2407

2104

250

0

50

100

150

200

250

2016201520142013201220112010

0

50

100

150

200

250

300

350

400

2016201520142013201220112010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

0 5 10 15 20 25 30

2016

2015

2014

2013

2012

2011

2010

0 50 100 150 200 250 300 350 400 450 500

2016

2015

2014

2013

2012

2011

2010

2257

4042

3409

3166

3251

3332

3435

262

173

107

89

3107

116

158

0 20 40 60 80 100 120 140 160 180 200

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25 30 35 40

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 2

2016

2015

2014

2013

2012

2011

2010

0 10 20 30 40 50 60 70 80

2016

2015

2014

2013

2012

2011

2010 36

53

43

44

71

59

15

0 05 10 15 20 25 3

2016

2015

2014

2013

2012

2011

2010

0 05 10 15 20 25

2016

2015

2014

2013

2012

2011

2010

0

30

60

90

120

150

180

210

240

270

300

2016201520142013201220112010

0 50 100 150 200 250

2016

2015

2014

2013

2012

2011

2010

190

194

237

151

89

37

31

0

10

20

30

40

50

60

70

80

2016201520142013201220112010

04

05

02

02

03

11

17

Emails that quote card numbers and expiry dates should never be sent nor should this information be disclosed

telephonically

Ensure you only place orders with your card on a reputable and secure website

when shopping online

Ensure that your bankcards are registered for 3D Secure ndash contact your

bank for more information on 3D Secure registration

1 2 3

WiseUpWatchOut

BREAKDOWN OF FRAUD TYPESCARD NOT PRESENT FRAUD

011 847 3000wwwsabriccoza

SabricZA SabricZASabric

011 847 3000wwwsabriccoza

SabricZA SabricZASabric