Warning - card sharks are targeting your credit

A few seconds. That was all the time Wainuiomata service station attendant Christopher Anthony Chad needed to cheat unsuspecting customers out of thousands of dollars.

As they momentarily turned their attention away, the 23-year-old would pounce - secretly skimming personal information from the confidential codes stored in the magnetic strip on their credit cards.

The details were transferred to dummy cards - and then the cards were used to buy more than $16,000 worth of goods and services.

Card skimming - or the use of computer programs to generate valid credit-card numbers - is now one of the fastest-growing scams, costing consumers, businesses, credit-card companies and banks hundreds of thousands of dollars a year.

Although the problem appears to have been around for years, it is becoming a growing menace in New Zealand, forcing banks and credit-card companies to come up with new and sophisticated ways to thwart card sharks.

Although banks now operate an automated computer system that flags anything out of keeping with a customer's credit-card spending habits, the Wainuiomata case has highlighted the ease with which credit-card fraud can be carried out.

While banks cannot put an exact figure on the scale of the fraud, they estimate skimming now makes up about 10 per cent or more of all credit-card fraud in New Zealand. Visa alone reported that in the past six months skimming contributed to 53 per cent of total credit-card fraud.

Overseas the figures are much higher - especially in Asian countries such as Thailand and Malaysia. In Australia the counterfeiting of credit cards makes up 50 per cent, or $300 million, of credit-card fraud.

The most vulnerable are New Zealanders travelling overseas, especially to countries in Asia, Europe and South America, where crime rings use portable card skimmers to obtain credit-card data.

Here in New Zealand the most high-profile case involved two Chinese men who were caught last year with hundreds of blank cards during a raid on a house in Te Atatu South.

Police and banks say they are doing everything to combat card cloning in New Zealand.

American Express head of security investigations for the Asia Pacific region Bruce Cox said: "The police capacity and customs vigilance in that area of fraud in New Zealand is pretty good. We've done a lot of training with immigration so they know what to look for and we've done a lot of training with the police in New Zealand."

Mr Cox said although most countries now had legislation for offences involving credit-card skimming the problem was made worse by the fact devices used to clone cards were still not illegal - and were easily available through the internet.

Banks are tackling the fraudsters head on with new computer technology to protect vulnerable customers. Among them is an automated computer system which flags any unusual transactions on a person's card. The card may then be cancelled and the customer alerted.

Wellington police district crime manager Detective Inspector Harry Quinn, an experienced fraud investigator, said: "Every time a new security feature is established in any financial transaction criminals will always work to beat the system."

Credit-card companies and police say the most effective way people can protect themselves from becoming victims in the first place is to make sure they don't give personal information away - especially Pin numbers and credit-card details over the phone, unless they know who they are speaking to.

Card-holders should also not lose sight of their credit card, especially when overseas, and be suspicious if they see it swiped more than once.

Westpac spokesman Paul Gregory estimated credit cards made up a small proportion of overall fraud in New Zealand, with most coming from stolen cards.

Mr Cox said ultimately it was the banks left carrying the cost of credit-card skimming as in most cases card-holders were reimbursed for their losses. However, indirectly the customer was paying through increased rates and charges.

In the Wainuiomata case, Chad pleaded guilty to nine fraud charges and will be sentenced this month. Other prosecutions are likely - but police say the way Chad operated showed "how easily it can be done".

Said Detective James Patea: "You've got to keep your eye on your card at all times."


- HERALD ON SUNDAY