June 6, 2010

Credit Card Fraud Invading World Cup

Banking officials are warning of fraud in South Africa as the four-week World Cup begins.

Jean-Pierre, a 59-year-old Frenchman received a call from his bank after arriving on his South African holiday that 300 euros had been suddenly charged to him. 

"My bank called on my cell phone to ask where I was, because my account had been debited four times on the same day," Pierre told AFP News.

"I immediately opposed the charges, but if my bank adviser hadn't been so attentive, that party would have continued until the end of my stay."

The South African Banking Risk Information Center said about 300,000 foreign visitors are expected at the World Cup, bringing a boost in spending that has "the potential of presenting criminals with more opportunities to commit fraud."

Pierre found himself in a clever scheme that allows criminals to copy his card's magnetic strip and his PIN code.  However, sometimes a card's details can simply be copied while customers make payments at a restaurant or a car hire.

FIFA has warned against emails and text messages promising match tickets or lottery winnings in exchange for a user's bank information.

"In South Africa, I would say it is a relatively high-risk country in the ability to use skimming devices," Jackie Barwell, financial crime manager at Actimize, an international fraud prevention firm, told AFP.

Magnetic strips are widely used in South Africa, although banks are replacing those cards with more secure models in order to prevent theft.

According to South African bank FNB, credit card scams totaled $1.1 million in March 2010, which is about half the level of the previous year.

"The newer chip and PIN cards function with a PIN and not a signature, which makes all transactions significantly more secure," Henk Vermeulen, FNB's credit card fraud specialist, told AFP.

Banks will watch transactions for suspicious purchases more closely during the World Cup.  Customers are urged to inform their banks if they plan to travel to South Africa.

Actimize warns these types of measures will continue well after the World Cup, adding that Asian banks are still catching scams that link to the Beijing Olympics two years ago.


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