In light of ASISA’s recently published consolidated statistics of fraudulent and dishonest claims, Herman Lombard, Founder and Executive Director of financial services provider African Unity, also emphasised this phenomenon in a recent media release. However, he stresses that economic fraud doesn’t just stop there.
The internet and social media have provided a whole new world of potential scams to fraudsters. Digital banking fraud has increased dramatically and in 2018 amounted to a staggering R262 million in gross losses in South Africa.
Lombard explains that the most common digital banking frauds are unauthorised SIM swaps while you’re on your banking app, or voice phishing or ‘vishing’ where a fraudster persuades you over the phone to divulge confidential information related to your bank account, like your one-time password (OTP).
People who live alone should remain especially wary as research shows this group is particularly susceptible to scammers and fraudsters, having no one else around to potentially warn or intervene. There appears to be a strong correlation between social isolation and becoming a victim of fraud. Financial illiteracy, as well as financial desperation, plays a significant role.
Experts warn that social-media based scams are also highly prevalent and effective in duping victims, far more than their veteran telephone- and email- based counterparts. “Don’t let your guard down and try to ensure the authenticity of each and every communication you receive.” says Lombard.
“Prior knowledge of how a scam works enables consumers to detect red flags and dissociate before they even begin to engage with scammers”, says Lombard.
Some of the most common types of online scams to watch out for in SA are:
Fake Facebook Giveaway – Scammers lure victims with promises of outrageously generous prizes, only to ‘phish’ the personal and financial details of those naïve enough to engage. These scams usually attempt to mimic a popular brand or celebrity page, as such your first line of defence is to ensure you are dealing with a Facebook-verified company page.
CNP (Card not Present) Fraud – This very common fraud involves illegitimate online purchases without the use of a physical card or the cardholder’s permission. The card details are usually acquired via data breaches, malware or phishing. Be cautious with your credit cards and only shop at reputable online stores. Watch your statements, and obviously never give out credit card details in your emails.
Advance-Fee Scam – this involves being offered a vast sum of money for a seemingly legitimate reason, on condition that a small administrative fee is deposited and / or bank details furnished. Often the ruse is successful because scammers pose as financial service providers offering personal loans. Always check whether an alleged financial services provider has a genuine official website. Spelling and grammatical errors are a major red flag. And remember that a real registered credit provider would never ask for money upfront in order to confirm a loan.
WhatsApp Scams – Similar to the Facebook scams, these work by virally spreading links that appear to be from either an above-board business or WhatsApp itself. Clicking on the links allow fraudsters to infiltrate your device with malware. Be very wary of any WhatsApp messages which offer prizes or discounts and which requires to be spread among your contacts.
“There are many types of scams which are designed to steal the things that you hold dear, like your identity and your hard-earned cash. If you have been scammed it’s important that you report it and that you talk about it to your friends and family so that they don’t fall victim to the many unscrupulous crooks out there,” Lombard concludes.