Untold truth of plastic card fraud

perversions – mainly on banks, retail, hospitality, tourism industry and, on the person of another. As we turned into the millennium, much publicity was given to the fact that many computer systems would experience problems. Many people were aware of it and business across the globe was on edge to witness the event, which never occurred.
By the same period in Zimbabwe, and most emerging economic markets in the region, people, and businesses alike belatedly awakened to the blitz by the “new” phenomena of Computer and Bank Card Fraud, commonly referred to as “plastic card Crime”.
The business mainly the acquirer and issuer banks and, proprietary merchants, did not fully comprehended the effects of the new crime wave. Neither did they comprehend how its diverse and borderless ramifications impacted negatively on their profits and customer savings, and, let alone, how to effectively combat it, in the absence of robust and or, non-existent security risk prevention structures.
Credit/debit card, and, any other form of cyber related crimes, put banks and the business at risk of losing money. Plastic money fraud and other computer related crimes, are on the increase globally.
Between 1990 and 2000, South Africa, for example, reportedly lost several billions of rands. Loss costs overseas in the same period were reportedly much, much higher. The period 1998-1999, Zimbabwe’s economy, then comparatively “at pick level”, lost several millions of dollars to organised card crime bandits.
Evident but unknown by the Zimbabwean business market at the time was that, the issuer, acquirer, acceptance point of sell merchants and individual card holders themselves, was still in budding stages of adapting and learning the business of card business, and, the risk dynamics that go hand-in-hand with it.
In 2000, and onwards, Zimbabwe started experiencing a down-turn economic and subsequent spiral decline due to socio-economic and political changes, and with it, criminals took a flight, true to the adage, “crime is a barometer of how an economy is performing”. In 2011, with the economy on the recovery path, the country is, as already is happening will start seeing the re-bounce of the much trendy and preferred mode of transacting, and with it, the return of card fraud, and other forms of cyber crime, once again, exposing the un-prepared banking community, un-suspecting card accepting merchants, and individual card holders, against at greater risk of suffering even more losses.
No doubt, paying with cards continues to get ever popular, because, other than being easy to carry, it is easy and convenient, but, alongside it, the registered growth increases the levels of fraud. Criminals have since inception, in the 1950s in use, been deceiving retailers, banks, police and genuine card holders, and getting away with it.
Reasons – (policy lessons for the future):
l Low risk, high reward
l Difficult to prosecute
l Penalties generally less severe.
Generally, depending with the type of crime, and the benefits accruing from the crime, criminals first rationalise whether its good or bad to commit the crime, and basing on conclusion, say to commit the crime, proceed, with the objective of obtaining money and material possessions.
Card fraud is thus, a low risk high reward type of crime. The major areas are in counterfeit (white plastic/skimming/card generation), fraud on card-not-present transactions, and hacking, (each) accounting for around a third of total card fraud in Britain for example. Fraud on lost and stolen cards is also a major problem, accounting for about a quarter of total losses
Banks for fear of unleashing even more plastic crime, will not reveal how many of the several thousands, in monthly card sales transactions generating millions of dollars, are fraudulent. Procedurally, banks should record and confirm fraud figures in order to correctly evaluate and plan robust prevention strategies.
Worryingly, it is not only the banks that get ripped off; merchants will have to pay up if it can be proven they did not adequately check the signature or identity of card user or, did not seek authorisation. The real losers though, are the genuine cardholders, who, unsuspecting or otherwise, through sheer ignorance or lack of adequate informative and awareness card education, are targeted by criminals.
Known is the fact that, across the globe, many card fraudsters, better known as bandits are recruited by shadow business operators, local and international organised money laundering crime syndicates, whose spoils, bankroll further criminal activity (money laundering). Stolen credit cards can be used by syndicate gang members running drugs and prostitution rackets.
As a way of laundering the dirty money, card fraudsters often buy items like domestic appliances and alcohol for resale.
Across the world, card crime syndicates linked to prominent football tycoons and senior police personnel have been uncovered. corrupt law enforcement agents, move with the sheep by day and eat with the hounds by night. In some cases, corrupt lawyers, accountants and members of the judiciary, among a wide spectre of professionals, are found linked to card fraud syndicates.
There is an urgent need for stakeholders (banks, merchants, police, and private security practitioners), to co-operate and work together to strategies on preventive and combative measures. These revelations while making interesting reading reflect danger that if (we) are not careful all the way, (we) risk prejudicing and sinking, not only businesses but also every card acquirer and issuer member bank.
Prevention Tips To Card Holders
Needless to say Credit Cards as with Cheque cards must be treated with the same care as your cheque book or cash. Here are some of the tips:
l Never keep your card in the same place as your cheque book, ID or passport.
l Memorise your debit card or ATM CARD pin number as this is your signature and gives access to your account.
l Always get your receipt from the shop attendant after every entered and run transaction.
Theft of unsigned cards is rife in South Africa, the USA and UK among many other emerging and developed countries either because, banks post the cards to customers and in the process they get stolen in the post and get used fraudulently, or customers upon receiving same, do not bother to sign them.
l Never trust anyone, spouse/partner or child by divulging your PIN. Remember your pin is your signature.