As the countdown starts towards end of year festivities and that hard-earned holiday, the Southern African Fraud Prevention Services (SAFPS) is urging consumers to be vigilant – this time of the year is also peak season for fraudsters and scammers as they target victims’ savings towards December.
Many South Africans recently contacted a popular Johannesburg radio station reporting increased attempts at banking fraud – with scammers sometimes becoming increasingly aggressive and convincing.
“This is not uncommon,” warns Roy Retief, head of operations at SAFPS. “Scammers generally tend to be more active during periods of increased consumer activity. It is essential to know how to spot a scam and what measures you have available to prevent you from becoming a victim.”
When it comes to banking scams, scammers constantly devise new methods to use on their victims. However, the most common scams follow a set formula.
“Impersonation fraud is rife when it comes to banking scams,” warns Retief.
Scammers will often contact potential victims posing as bank representatives. Armed with a lot of information about their potential victims, scammers will ask them to confirm banking details or other sensitive information such as ID numbers.
“In line with the gravitation towards online banking, many scammers will phone their potential victim posing as a bank representative and tell them they need to perform an important action on their online banking profile,” Retief says. “Scammers are often tech-savvy and can remotely access a victim’s compromised mobile device, triggering a technical issue to create a sense of urgency or panic. The victim then feels they need to follow the prompts from the scammer to secure their device. Armed with this, scammers can cause significant damage.”
A new modus operandi involves scammers calling potential victims and asking them to move money into a safer or higher-interest-bearing account. “Victims will unknowingly be moving money from their account into the scammer’s account,” says Retief.
Nerosha Maseti, lead ombudsman for the banking division of the National Financial Ombud scheme (NFO), points out that complaints related to banking scams have been – and continue to be – the biggest contributors to formal complaints opened at the NFO’s banking division.
“In 2023, of the 8 521 formal cases which were opened at the Ombudsman for Banking Services for the year (being the predecessor to the banking division of the NFO), 3 380 or 43,47% were categorised as fraud,” says Maseti.
She adds that the complaints are prevalent across the industry. In the context of a changing global banking landscape, where branch networks are shrinking, volumes of digital payments are increasing, and payments are being processed in seconds, fraudsters are creatively finding new ways to steal from banks and their customers across the banking industry.
“Banks globally and within our jurisdiction are seeing an increasing trend in scams,” says Maseti. “Fraudsters are manipulating and coercing customers into making payments to them, bypassing bank controls.
“When investigating such complaints, our investigation will typically involve ascertaining whether there was wrongdoing or negligence on the part of the bank that caused the customer’s losses or contributed to them,” Maseti explains. “If, after our investigation, we find that the bank could have prevented or mitigated the customer’s losses but failed to do so, we have the power to recommend to the bank involved to refund the portion of the customer’s losses that could have been prevented but for the bank’s negligence.
“It is important to note, however, that our starting point when dealing with such complaints is that the bank customer is liable for all transactions they do voluntarily or that take place using that customer’s confidential banking access details,” Maseti adds. “Liability only shifts to the bank once fraud or compromise of the confidential access details has been reported to the bank. Only then will the bank be expected to take immediate steps to prevent the customer’s losses. We can only make a recommendation where we find that there has been unfair treatment, negligence, non-compliance or maladministration on the part of a bank.”
Tips on how to prevent being scammed include:
* Ignore any SMS or email notification that asks you to follow a link and provide your username and password;
* Do not store any banking credentials on your smartphone;
* Do not let your browser (Safari, Chrome and others) save your banking passwords;
* Ensure that your banking credentials are unique and not used to log in to any other websites, email accounts, or apps;
* When selling your phone, ensure all your details are removed, your Banking App is uninstalled and delinked from your banking profile, and the phone is reset to factory settings;
* Never leave your smartphone unattended when you are logged in;
* Use two-factor authentication whenever possible to increase the security of your login;
* Do not jailbreak (your iPhone), use pirated software, or compromise the security of the software on your device as this could easily lead to attackers spying on you without your knowledge;
* Install a reputable anti-malware solution on your device to detect and block signs of malicious activity. Remember to keep the software updated to ensure maximum effectiveness;
* Do not access your banking app in busy public places or while outside venues waiting for e-hailing services where it is easy for a criminal to snatch your mobile device while your banking app is unlocked; and
* Do not access your banking app or perform sensitive financial transactions while connected to unsecured public wi-fi networks.