NAIROBI, Dec. 9 (Xinhua) — Credit and ATM cardholders in Kenya are losing lots of cash to their close relations and people entrusted to serve them in places like banks in cases of fraud.
Topping the list of those committing the crimes are cardholder’ s spouses, children, friends, colleagues, relatives and clerks in banks and shopping centers.
The perpetrators exploit the trust cardholders have on them to get their card information.
Once they get the PIN, they steal the card and use it to withdraw money from the ATM or go on a shopping spree before the cardholder discovers.
Jane Magayo, an administrative assistant in Nairobi received her bank statement recently and realized 300 U.S. dollars had been withdrawal from her account.
She contacted her bank and got the details of the transaction. When she insisted she did not make the withdrawal, the bank checked their closed-circuit television (CCTV) footage.
Magayo was stunned to learn that a messenger in the office had withdrawn the money.
Jane had kept her card with her PIN in her handbag, from where the messenger stole and used it. While banks advise cardholders to be cautious with their account information, most people do not do so.
A manager at a bank in Nairobi says when a customer complains money has been withdrawn from her account, the best the banks does is to identify the fraudster through CCTV footage.
“We do not involve ourselves in resolving the matter because most of the time the victim and the perpetrator know each other. We advise them to go to the police,” he says.
The manager confesses that he has also fallen prey to card fraud. “It was perpetuated by my wife. She took my card one time and went on a shopping spree spending over 350 dollars, but she did not tell me. I discovered later when we had separated,” he recounts.
The manager says his bank receives at least 10 complaints per month. Most of the cases involve cardholder’s close relations.
Interestingly, he says victims do not report the fraud to the police. “They change their PINs and move on because like in the case of spouses, they want to safeguard their marriages. This makes it more difficult to fight the crime,” he says.
According to the bank official, frauds can occur in various circumstances. These include when a card is lost or stolen, when it is not received by a genuine owner, when it is skimmed or when there is an identity theft.
He says that fraudsters obtain card information from cardholders in several ways.
“They can do it through phishing. This is where they send a fraudulent e-mail to cardholders purporting to be from their banks, asking them to verify their account numbers or passwords. Once cardholders reply the mail, they then use the information to make forged cards,” he says.
Second, he says when shopping, the cashier can “skim” the card to capture its information without the cardholder’s knowledge. “They do this by running the card twice. The first time for the actual transaction made. The second time to get the card information. They will then pass the information to crooks who in turn use the information to make a card,” he says.
The manager says most of those who skim the cards are female cashiers working in shopping places. “Cardholders become less vigilant when they find them at the counter, unlike when they find male cashiers. Naturally they expect women to be trustworthy,” he says.
Third, he says cardholders who lose their documents or carelessly discard transaction receipts also fall prey to fraudsters. “Fraudsters can use information found on the receipts or stolen documents to take over somebody’s account,” he says. “They can open an account under the account holder’s name or they may apply for a replacement of a lost card. The replaced card will then be used fraudulently.”
Both ATM and credit cards can be used to commit frauds, he says. Credit cards and visa-enabled ATM cards may be used to withdraw cash from the ATM or for shopping, while ATM cards may be used to withdraw money from cash points.
With e-commerce gaining currency in Kenya, the manager says online buyers are also at a great risk of unknowingly passing on their information to fraudsters. “Hackers can get information of those who have made purchases through websites and then make fake cards, which they will use with less detection,” he says.
Often targeted are persons using their credit card on the internet for the first time. This is where many Kenyans belong. Many people are now using the website, Amazon.com to purchase among other items mobile phones and medical drugs. “The risk is greater on non-secure websites where the data can be easily compromised,” he adds.
While people outside the card issuing institutions commit some of the crimes, reports indicate that most of the frauds are perpetuated by bank employees.
A recent report by the Anti-Banking Fraud Unit reveals that banking fraud is on the rise in Kenya. In the period January to June this year, the report says commercial banks lost 9.5 million dollars, with a good number of the cases targeting ATM and credit cardholders.
Interestingly, the report singles out bank employees as some of the perpetrators of the crimes. It says the employees either execute the crimes themselves or collude with fraudsters.
On the other hand, Central Bank of Kenya (CBK) estimates that about 62,500 dollars is stolen daily.
Absence of a law specifically to deal with card related crimes in Kenya, analysts observe may be giving thieves a loophole to operate freely and get away with light sentences. Police treat card related crimes like any other case of fraud.