Controls, such as the use of biometric systems by financial institutions; the Financial Intelligence Centre Act and the roll-out of chip-and-pin technology, have contributed to a 13.8%, or R81.4-million, drop in local card fraud to R509.3-million between January and September, the South African Banking Risk Information Centre (Sabric) revealed in its ‘Card Fraud 2015’ report on Wednesday.

Of the R294.5-million stolen in South Africa, 55.8% of credit card fraud incidences took place in Gauteng, followed by 25.5% in the Western Cape and 9.5% in KwaZulu-Natal, while 42.9% of debit card fraud occurred in Gauteng, 12.5% in the Western Cape and 13.3% in KwaZulu-Natal.

Meanwhile, Sabric also disclosed that credit card fraud had dropped by 28.6%, from R353.3-million in 2014, to R252.2-million this year, while debit card fraud rose 8.3%, from R237.4-million in 2014, to R257.1-million between January and September this year.

While nearly 90% of all credit cards and 65% of all debit cards in the country were chip-and-pin cards, which used integrated circuits to store data and which offered improved security and the possibility for finer control of offline credit-card transaction approvals, Sabric CEO Kalyani Pillay told journalists during a media briefing that this did not entirely de-risk card transactions.

She noted that not all countries or cities were compliant with the EuroPay, MasterCard and Visa, or EMV, standard and that not all point-of-sale machines were equipped with a chip reader, which made travellers, in particular, more susceptible to card fraud.

Sabric also revealed that both debit and credit card fraud, where a card had not been present (CNP) increased in the nine months, by 12.6% and 15.8% respectively. “Banks now allow consumers to use their debit cards for online purchases, as not everyone has a credit card. This creates the opportunity for more debit card fraud to take place,” she said.

In both types of fraud, most fraudulent activities took place outside South Africa, averaging about 67%, while CNP credit card fraud comprised 75% of gross credit card fraud loss.

The report noted that the most concerning trend highlighted in this year’s fraud figures was the “sharp” 62% increase in lost and/or stolen debit card fraud, with 94.2% of incidence taking place in South Africa. It also contributed 46.3% to the gross debit card fraud loss.

Sabric pointed out that, while a number of initiatives to curb counterfeit and CNP fraud were implemented by banks, criminals seemed to adapt by reverting to a previously common modus operandi of shoulder surfing and card swapping at automatic teller machines (ATMs).

“Therefore, collaborative counter-measures by banks and cardholders such as cameras at ATMs, bank security guards at high-risk sites and even posters at ATMs warning cardholders to be vigilant, are of the utmost importance,” it stated.