Tap-and-go bank cards that do not require a PIN for purchases up to R500 are a boon for criminals who are intent on going on a festive season shopping spree.
The Banking Ombud said it has received complaints of tap-and-go transactions conducted with lost or stolen cards, and the ombud urged the public to be on guard, particularly because with fraud attacks are expected to increase at this time of the year.
However, the Ombud has not received any complaints relating to criminals siphoning money from tap-and-go cards using a scanning device.
The Banking Division of the National Financial Ombud Scheme (NFO) said it is aware of reports about a voice-note circulating in South Africa raising concern about potential fraud involving the tap-and-go functionality on bank cards with the use of unauthorised devices to access customers’ funds without detection.
The voice-note claims that criminals are exploiting the tap-and-go facility and stealing money or card data by tapping a near field communication-enabled point-of-sale device close to a victim’s bank card through their wallets, clothes, or handbags.
It is further claimed that fraudsters use these devices to perform as many transactions under R500 as possible until all the funds available in a customer’s account have been used.
Nerosha Maseti, the Lead Ombudsman for the Banking Division, confirmed that the NFO has yet to deal with a complaint regarding this specific modus operandi.
Her office has, however, dealt with complaints relating to tap-and-go transactions performed with customers’ cards after they have been lost or stolen. She advised customers immediately to report lost or stolen cards to their banks, to avoid potential losses.
“Banks set limits on NFC payments done using bank cards to reduce the risk of large fraudulent transactions.
“The tap-and-go payment option using a bank card is generally only available for a predetermined number of low-value transactions on any specific day, after which a PIN would be required to complete the transaction,” Maseti said.
The Ombudsman for Banking Services (now the Banking Division of the NFO) previously confirmed receiving numerous NFC fraud-related complaints that were investigated by the office related to smart devices. In those cases, fraudsters used stolen card information to link their smart devices, such as smartphones and smartwatches, to payment platforms such as Samsung Pay, Apple Pay, Garmin Pay, and Google Pay.
“Improved customer experience and convenience are some of the biggest benefits, according to banks, of the tap-and-go functionality.
“Banking customers should note, however, that some banks allow their customers to disable the tap functionality on their cards. Customers will then only be able to use the card by inserting it into the point-of-sale machine and entering their PIN.
“It remains important for banking customers to always be aware of the possibility of fraud and to remain ever vigilant and cautious with their bank cards and card details,” Maseti said.
How to avoid bank card fraud
The NFO provides the following tips:
- Always keep your card and PIN safe and don’t share your card and PIN with anyone.
- Make sure you understand your bank’s tap-and-go terms and conditions, on which of your cards the facility is activated, and the applicable transactional limits.
- Make sure that you receive notifications each time that you transact on the tap-and-go facility and that you receive statements of account regularly. This way you can report any unauthorised transactions to your bank as soon as possible.
- If you feel unsafe, speak to your bank about the possibility of deactivating the tap-and-go facility. There are banks that have this option on their banking apps. Alternatively, speak to your bank about your other options, including having to insert a PIN for any transaction regardless of the amount, or setting an acceptable daily and monthly limits for tap-and-go transactions done without inserting a PIN.
- Ensure that you always tap the point-of-sale device yourself, and that your tap-and-go-enabled bank card never leaves your hand.
- Report lost and stolen cards immediately.
Maseti encourages any banking customer who may have fallen victim to this type of fraud or any other fraud or scam, and who has not been assisted by their bank, to lodge a complaint with the NFO.
The NFO’s Banking Division will investigate all complaints at no charge to the customer and ensure that the customers have been treated fairly by their banks.
