FNB and Visa join hands to fight card cloning fraud

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WINDHOEK – In a first for a Namibian bank and a global payments technology company, FNB and Visa have joined forces to offer card fraud prevention tips and insights to Namibian consumers in what is expected to become an annual card security media briefing in Windhoek.

“Card fraud is an ongoing concern for the bank and electronic payment companies such as Visa. While Namibia is not a primary target country for card fraudsters, the bank is detecting fraud incidents that could be prevented by consumer education,” said Ingrid Katjiukua, Manager at Forensics, FNB Namibia.

Primarily, banks and consumers are at risk of card cloning which includes a series of events such as card skimming and PIN interception. Other types of card fraud such as illegal use of card details seldom occur.

Card cloning involves the criminal obtaining a customer’s card for a few seconds and during this time the information on the magnetic strip of the card is copied onto a handheld skimming device. The fraudster then observes the customer entering their personal identification number (PIN) onto the keypad of an ATM or a retailer’s card machine. With this information, the fraudster is able to produce a counterfeit card and then uses this card with the PIN to perform transactions or withdraw money at an ATM from the victim’s account “We are noting regular incidents of card cloning in Namibia,” added Katjiukua.

Taking a longer term view, FNB said it noticed a peak in card cloning in 2010, with a very sharp drop of more than 50 percent in 2012 and steady declines in 2014. More recently however, there was a small increase in card cloning during January 2015.

“Card cloning is a fairly complex type of crime and involves the interaction of small syndicate with some specialized equipment. Thus, the actions of banks, the police and a vigilant customer can eliminate this fraud almost entirely,” noted Katjiukua.

With a few simple precautions, a bank card with a smart chip and PIN is extremely secure, much safer in fact than carrying cash. This is set to become the dominant transaction mechanism replacing both cash and cheques in future.

“Using debit or credit cards for everyday purchases offers greater security, control and convenience than transacting with cash; it is also one way of ensuring personal finances are managed effectively with minimal costs for the cardholder,” explained Fred van der Westhuizen, Director for Risk Services for Visa in Sub-Saharan Africa.

“PIN security is the single strongest defence against card fraud. As long as your PIN is a secret, nobody can use your card at a retail point of sale (PoS) or at an ATM. Unfortunately, when you give your PIN to a family member, or if you write down your PIN and keep this note near your card, you have lost all confidentiality and should change your PIN at one of the branches as soon as possible,” said Van der Westhuizen.

“As opposed to magnetic stripe technology, a chip is difficult to crack. An important aspect of a Europay, MasterCard, and Visa (EMV) transaction is its use of dynamic data. Each transaction carries a unique ‘stamp’, which prevents the transaction data from being fraudulently reused, even if the data or the card is stolen. This saves banks and consumers from losing money through fraud,” remarked Van der Westhuizen.

From FNB’s perspective, skimming and cloning will remain the big threats to customers during 2015. The bank urges its customers to take extra care when transacting at an ATM and when paying with a card at a retailer.

“PIN-enabled transactions are deemed by the bank to be authorised by the account holder. Should a dispute arise on a cash withdrawal or a purchase, and the PIN has been used, the bank will consider this is a legitimate transaction and will investigate to determine if the card has been cloned. If there was no skimming and cloning, the bank will not refund the customer. Thus, PIN security is one of the highest priorities in preventing card fraud,” said Katjiukua.

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