Banks warn of new scam targeting customers in South Africa

Fraud continues to pose the risk of serious financial losses for banking customers, and all indicators point towards the fact that there are new scams and an increasing number of the victims, says Reana Steyn, the Ombudsman for Banking Services (OBS).

The basic modus operandi of these scams is not new. However, over the years, there is a constant change in the execution techniques that fraudsters have applied, she said. “The success of these scams, and their evolution, is heavily guided by how the consumer will react in each situation.”

Steyn highlighted two recent matters that were investigated by her office where two private banking customers fell victim to the same scam under the exact same circumstances.

The story behind convincing the victims to disclose their confidential banking information was new. However, the basic scam remained the same, as did the results, she said.

The New Phishing MO Scam

Mr M* advised that he received emails supposedly from the South African Post Office (Post Office). The emails informed him that he had unclaimed packages waiting for him at the Post Office Head Office.

He advised the representative in the email that he in fact had a package at the Post Office which he was aware of and had not collected yet. Mr M then received an SMS from the Post Office advising him to pay a fee of R42.50 for the package to be released and sent to his nearest Post Office.

Mr M followed the instructions on the link he received, and the link opened to a payment option on an official Post Office Payment page. He then inserted his card details and received an ‘Approve it’ message on his cell phone. He accordingly approved the transaction.

Immediately thereafter, he received another ‘Approve It’ message from his bank and he noticed the word Singapore and realised that he was being defrauded.

He immediately reported the fraud to his bank and instructed the bank not to release the pending transaction of R16 061.80. However, since the transaction was authorised with the use of the card details and the ‘Approve It’ message, the bank had already released the transaction and refused any liability for the loss that was suffered.

Mr M then reported the incident to the OBS and asked for assistance with his complaint against the bank.

The OBS determined that Mr M had in fact made the payment himself and approved the transaction through his Banking App.

The OBS further found that although Mr M advised that he thought he was making a payment for R42.50, however, the message he received from the bank for the authentication of the payment read: “You are about to make an online purchase of CHF 1, 000.00 at BIGO Live”.

Since it was clear from the message that the payment was not to the Post Office and that the purchase amount was not R42.50, the OBS found against Mr M and concluded that he was unfortunately a victim of a phishing scam where he willingly compromised his confidential banking details.

Big money

Steyn warned that banking fraud has become a very lucrative business for online scammers and the banking fraud matters investigated by her office in 2021 alone exceeded R295 million.

“This is an extremely worrying trend, especially when considering that these funds are mostly lost by individuals and small businesses who, in the majority of cases, are not in a financial position to suffer any kind of financial setback. In addition to the negative effects of Covid-19 on finances, most of these victims will sadly never be able to recover from these financial losses,” said Steyn.

The Ombudsman confirmed that it was unfortunate that, in most of these matters, the amounts that were claimed were not recovered as they had already been withdrawn by the fraudsters.

She reiterated that the losses were largely due to the victims falling hook line and sinker to typical and well-publicised scams.

Steyn stressed that no legitimate caller or email from the bank will ever ask a bank customer to provide their card number, passwords, and especially an OTP over the call or a link. She further advised consumers to refrain from using any links that are received to make payments.

Consumers should be extra vigilant when it comes to a link where you are instructed to put in your banking account details that can be used to access the funds from your account.


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Banks warn of new scam targeting customers in South Africa