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25 October 2006
(Johannesburg, South Africa)
South African banks are spending millions of rands on added security measures in an attempt to stem a growing wave of "card skimming" crime at cash machines across the country.
The move comes as figures show that the value of ATM fraud rose in the first six months of 2006 compared with the same period last year. Levels of ATM fraud have grown dramatically in the past five years, and Standard Bank says skimming now accounts for an even greater proportion of cash machine fraud in South Africa than conventional card swapping.
Skimming involves attaching a small electronic device to the card entry slot of a cash machine to record a card's details without the cardholder's knowledge. Criminals are then able to produce a fake card and use it to withdraw money from a cash machine.
The rise in skimming coincides with a significant drop in internet-based crimes, like hacking and phishing, says Standard Bank security expert Pat Pather. "We've put a lot of systems in place to foil internet crime, like two-factor authentication, but as banks close off one avenue, criminals will try another. Card skimming is now the most frequently used method of ATM fraud being perpetrated across the globe."
Standard Bank says it is spending "millions of rands" on security around its cash machines. The measures include increasing physical security, displaying warning posters, installing new anti-skimming devices and monitoring customers' accounts at identified hotspots.
"We have identified the key areas being targeted by fraudsters, and we are making significant investments to protect our customers' hard-earned cash," says Pather.
Part of the problem is the ease with which it is possible to copy the magnetic strips on the back of customers' cards. It is currently possible to buy skimming machines on the internet, says Pather.
However, Pather emphasises, the majority of cash machine withdrawals are safe.
"Remember, it is much safer to carry a card around than keep a lot of cash in your wallet. If you are a victim of card fraud, you will not suffer any financial losses, as long as you haven't acted negligently."
And while card skimming is currently on the rise, Standard Bank says it will start dropping in the next year or two as new high-tech smart cards are steadily introduced. The growing use of chip-only cards will ensure that copying chips is not possible, because they are encrypted.
New chip-based cards aim to cut fraud by including a smart chip, which can store more information than the usual magnetic strips, and also by having users verify transactions by keying in a PIN rather than signing a receipt.
France pioneered the technology more than 10 years ago - reportedly cutting fraud by almost 80% as a result.
Meanwhile, Standard Bank is urging customers who want to withdraw cash at their ATMs to be vigilant and help reduce the chance of fraudsters getting hold of their PIN details. Cardholders should also check their accounts regularly to spot bogus transactions.
What can customers do?
- Always protect their PIN.
- Don't write the number down.
- Cover the keypad while entering the number.
- Don't give the number out to anyone.
- Know where the security cameras are located. While many ATM have cameras, they won't be positioned to record the keypad.
- Be wary to any offers of 'help' with ATM transactions.
- Be suspicious of a machine that has signage indicating they should use a specific machine.
- Use a different machine if they feel uncomfortable about the ATM instructions.
- Report anything that seems suspicious or strange about the ATM machine to their financial institution.
- Alert the bank immediately to any suspicious activity around an ATM. This could include anyone offering help, tries to look over their shoulder, or is taking pictures in the area.
- Call their bank right away if the machine retains the card.
- Be on the lookout for suspicious transactions on monthly statements.
Get some more tips on secure banking.
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