Many South Africans are struggling with rising living costs and job insecurity. These pressures can leave even the most careful earners feeling desperate.
Salem Nyati, consumer financial education specialist at Momentum Group, warns that fraudsters often target people when they are most vulnerable and searching for solutions.
The digital age has changed how we manage our money. Online banking, instant loans and digital communication are convenient, but they also make it easier for scammers to operate.
“Desperation makes people more vulnerable, and scammers are becoming more sophisticated every day,” says Nyati. “They use advanced technology, including artificial intelligence, to send convincing emails and WhatsApp messages, create fake websites, and make phone calls pretending to be legitimate lenders, banks or insurers.
“They offer loans or financial solutions that seem too good to be true.”
Interpol’s 2023 African Cyberthreat Assessment found a sharp rise in financially motivated cybercrime across Africa, especially ransomware. Shadowserver reported that South Africa is the most targeted country, with 42% of all ransomware attacks in Africa. Morocco follows at 8%, with Botswana and Egypt at 6% each.
Anyone can fall victim to these scams. Nyati says that awareness and preparation are your best defences.
Common credit scams in South Africa include:
- Advance fee loans: Scammers promise a loan but ask for a “processing” or “admin” fee up front. Legitimate lenders do not do this.
- Fake debt review offers: Fraudsters pretend to be debt counsellors, offering to clear your credit record for a fee, but provide no real help.
- Phishing for personal data: Scammers pose as banks or lenders to trick you into sharing your ID, banking details, or passwords.
- Loan sharks (mashonisas): Illegal lenders may charge extremely high interest, keep your ID or bank card as security, and use threats or violence to collect payments.
Many South Africans have lost money to fake credit providers. People hand over personal details or pay fees, only to discover they have been scammed.
Nyati says that desperation can cloud your judgement. “When you are worried about paying rent or covering an emergency, the promise of instant cash can be tempting. Scammers know this and pressure you to act quickly.”
Although South Africa’s credit market is regulated, scammers are always looking for new ways to trick consumers. Nyati recommends the following tips to protect yourself:
- Protect your personal information: Only share your ID, bank details, or payslips if you are sure the recipient is legitimate.
- Read the fine print: Always insist on a written contract and read the terms before agreeing to any loan or insurance policy.
- Verify the lender: Check if the provider is registered with the National Credit Regulator (NCR) at www.ncr.org.za. If unsure, call the NCR for confirmation.
- Never pay upfront fees: Real lenders do not ask for payment before giving you a loan.
- Report scams: If you suspect a scam, report it to the South African Police Service (SAPS), NCR, or the Financial Sector Conduct Authority (FSCA).
- Educate yourself: Visit reputable financial education websites or speak to registered advisers for guidance.
Nyati emphasises that scammers are always evolving and their technology is advanced.
“By staying informed and taking control of your finances, you protect both your money and your peace of mind,” concludes Nyati. “If something sounds too good to be true, it probably is. Be cautious and always put your financial wellbeing first.”