Over the past year, South Africans have faced increased risk when it comes to becoming a victim of fraud.
These trends are reflected in the latest statistics from the Southern African Fraud Prevention Service (SAFPS), comparing the first five months of 2022 to the same period in 2021.
“This is particularly concerning given the economic climate that we are currently facing,” says Manie van Schalkwyk, CEO of the SAFPS. “Consumers are facing a significant cycle of high inflation and are looking for ways to make ends meet. This makes them increasingly vulnerable to scams and schemes which are being carried out by highly motivated, highly skilled fraud syndicates.”
Money mule
One of the crimes that the SAFPS has noticed an increase in is what is called a money mule. This is when a person approaches someone else and asks them if they can use their account to send money to a relative in another country.
“While this should immediately be a red flag, you will be surprised at how many people willingly comply in the hope that they can be of assistance,” says Van Schalkwyk. Unfortunately, this then opens the door for fraudsters to take significant advantage of their victim.”
When it comes to the misuse of accounts through fraudulent conduct, the risk of money muling has increased by 97% over instances recorded in 2021.
“This is a significant problem and not only limited to South Africa,” says Van Schalkwyk. “Money muling is a significant global risk. Reports from Cifas in the UK point out that money muling funds illegal activity such as money laundering, terrorism and human trafficking. Obviously, this is concerning, particularly within the South African content.”
To prevent this, Van Schalkwyk urges the public to remain as vigilant as ever and to be very protective of their banking details. “The person in front of you may be a person who is in genuine need. However, they may also be fraudster.”
He adds that biometrics is adding an extra sophisticated layer of security to try and prevent financial crime from taking place. However, this makes fraudsters more insistent and increases the level of involvement from the public as they want to lend a helping hand.
Impersonation
Impersonation has always been a significant crime is South Africa as fraudsters prey on their victims through phishing, smishing and vishing.
“Impersonation increased by 264% for the first five months of the year compared to 2021 and could be linked to recent major data breaches. The various data breaches have all highlighted the vulnerability of personal information and how easily accessible they are to the motivated criminal,” says Van Schalkwyk.
Forged documentation
South Africa has one of the highest reported unemployment rates in the world. Current statistics from Stats SA reports that the official unemployment rate is 34,5%.
“In an effort to increase employability, we are seeing an increase in false qualifications which has increased by 158% over the cases reported in 2021,” says Van Schalkwyk.
Stats by province
Gauteng is the economic hub of the country and is the province which has the highest fraud stats. The SAFPS points out that the province makes up 62% of the country’s total fraud incidents and that the number of fraud incidents that were recorded in 2022 increased by 117% over the number of incidents reported in 2021.
KwaZulu-Natal contributed 18% of the fraud incidents in 2022 and the SAFPS points out that the number of incidents reported this year increased by 106% over those recorded in 2021.
“The interesting statistic for the SAFPS is the increase in the Western Cape,” says Van Schalkwyk, who points out that there are visible signs of an increase of fraudulent activity in this province. The Western Cape made up 8% of the country’s total fraud incidents and there was a 133% increase over the number of fraud incidents reported in 2021.
Fraud protection
SAFPS offers Protective Registration, a free service protecting individuals against future fraud. Consumers apply for this service and the SAFPS alerts its members to take additional care when dealing with that individual’s details.
Through Fraud Victim Registration, the SAFPS will assist applicants in preventing fraud that is a result of identity theft and impersonation. This will protect applicants from associated financial implications. The SAFPS will issue applicants with a Victim of Impersonation Letter which they can share with future credit providers to assist in any verification processes.
SAFPS also offers its Secure Citizen service that allows banks and other financial institutions to verify the identity of the person by accessing the Secure Citizen database.