JEDDAH: Despite numerous reports on the subject over the past few years and an increasing number of consumer complaints to local banks, Saudi credit card users are still one of the biggest targets of fraud.
The most prevalent complaint has been related to how Saudi citizens have been swindled by people abroad while credit cards are still in the possession of cardholders.
“I was staying in a five-star hotel in Makkah a few months ago and decided to check my account status online when I returned to Riyadh,” said Moulana, an employee at a government hospital. “That was when I noticed there were 12 charges to my National Commercial Bank Visa card amounting to SR8,026.”
Since late October when the problem first erupted, Moulana has received little help in rectifying the fraudulent charges. In spite of his daily calls to get assistance from National Commercial Bank’s customer service hotline, the bank has been adding on delinquent fees for not paying the minimum payment on his credit card each month.
“I think now since they keep adding on late charges I owe over SR9,000 on my credit card bill,” he said. “Also I am very upset with the bank, why they did not notice that there were charges in Makkah and the following day multiple charges made to the card in Paris and then immediately more charges in Hong Kong.”
Moulana also said that a doctor who works with him at the same government hospital also stayed in the same hotel located minutes from the Masjid Al-Haram about a month later and came back to Riyadh. A week later he said that SR10,000 worth of fraudulent charges on his credit card appeared from London.
Moulana said he contacted a close friend who is also a senior manager at one of the foreign banks in the Kingdom for advice and was told that he too had been incorrectly charged two hefty sums made in far away countries while he was visiting Sri Lanka on a medical vacation.
“My friend told me the best course of action is to wait and see the outcome of the investigation . . . and hope for the best,” he said.
Arab News attempted several times, by e-mail and telephone, to contact the spokesman of NCB for comment on the issue but was given no reply.
Further reports connected to the increase in credit card fraud around the Kingdom was also made known to Arab News through a Saudi businesswoman who was sent last month to the US to attend some meetings. She said her SAMBA Visa card was canceled without warning, leaving her nearly stranded without a means of paying for transportation, food or accommodations.
“After attending the scheduled meetings I was in the process of traveling to a nearby state for further scheduled meetings when I tried to use my Visa card and was notified that it had been canceled,” said Lina J., an executive-level employee of a prominent Saudi company.
“I immediately called the SAMBA customer service department to see what the problem was and they told me that they thought it was suspicious that I had a number of charges made in the UK six months earlier. Shocked, I explained that because I travel frequently for my job and that the charges were legitimate.”
To make matters worse, Lina was told that the action of canceling her card was irreversible and that a new card would have to be issued, which would take time. “I ended up paying for the courier charges and got the card within four days,” she said.
Lina said during the four days she was lucky enough to have been able to call the home office of her company to arrange for her stay at a hotel. “I don’t want to think what would have happened to me if I had been on my own and didn’t have the support of my employers behind me to guarantee my accommodation,” Lina said.
Amani, B, another Saudi victim of fraud, said a merchant had swindled her. “I received a SMS message that SR12,000 had been charged to my card after making a purchase at a local beauty supply store,” she said. “I immediately complained to the bank, which found out that the cashier of the shop had paid online some of his personal bills using my credit card at the same time he was swiping my card for to purchase the cosmetic items I had chosen.”
To get more prospective into why Saudis have become such prime targets of credit card fraud over the past few years (unable to get solid comment from local financial institutions on the problem) Arab News contacted US-based First Data International, a leader in electronic commerce and payment solutions for businesses worldwide.
First Data signed a five-year contract with SAMBA Financial Group in May 2007 to handle its credit card processing portfolio, provide risk management, and fraud and behavioral scoring tools.
“Credit card fraud is a significant issue for the banking industry and consumers today,” said Brian Quarrie, managing director of First Data in the Middle East. “There is no fool-proof measure to thwart fraud.”
He said the most common method, called “skimming,” involves obtaining sensitive data about the card at the point the cardholder is making a legitimate transaction.
“An example of this could be at an ATM machine, where criminals attach a small device in or in front of the card reader slot, which reads and stores the magnetic strip on the card,” said Quarrie.
“The fraudster will also wish to capture the PIN number associated with that card and generally this is achieved by attaching a small hidden camera somewhere on the ATM that is focused on the PIN-pad of the ATM. Sometimes these devices even use Bluetooth technology that can immediately send the magnetic strip information and the image from the camera to waiting fraudsters.”
Other ways to “skim” involve rouge merchants.
“The staff-member may need to walk away with your card to complete the transaction,” said Quarrie. “This would provide the opportunity to swipe the card through a hand-held skimming device as well as the legitimate point-of-sale terminal.”
Quarrie advised consumers to always keep an eye on their cards and never let the shop assistant take the card out of their sight, even for a few seconds.
“Consumers should be protecting their card information in the same way that they would protect other property that is of value to them,” he said.
In related news, local banks in cooperation with the Saudi Arabian Monetary Agency, the Kingdom’s central bank have launched an awareness campaign with the aim of educating the public about the aspects of credit card and banking fraud and how to protect themselves.
