Warning over new bank scam in South Africa

 ·11 Jul 2023

The Financial Sector Conduct Authority (FSCA) has urged caution over a new ‘money mule’ bank scam showing face in South Africa.

There has been a significant rise in money mule scams recently, with criminals especially targeting vulnerable and cash-strapped individuals who are facing increasing financial pressures during challenging economic times, the FSCA said.

Under the new scam, criminals are approaching South Africans, asking them to use their bank accounts to deposit or transfer money, often with the promise of a reward or payment.

The FSCA said that consumers must exercise extreme vigilance and caution when approached by unknown individuals or organisations asking for this.

According to the FSCA, this ‘money mule’ scam occurs when fraudsters trick bank customers into allowing them to use their accounts to receive and transmit money gained through illegal activities such as drug and human trafficking, theft, fraud and corruption

“In some cases, criminals may also approach unsuspecting victims to use their valid identification documents to open bank accounts on their behalf. Such accounts are also used to receive and distribute proceeds from criminal activity,” the FSCA said.

The use of bank accounts for criminal purposes is illegal, stressed the organisation.

Owners of bank accounts that fall victim to the scam or facilitate criminal activity may ultimately be charged and convicted of a crime – even if they are unknowingly participating.

Punishments include imprisonment and or being banned from having access to a bank account in the future.

The FSCA has provided the following safety guidelines to avoid falling victim to the money mule and other financial scams:

  • Never allow your account to be used by another person to deposit money into or transfer money out of it.
  • Never open a bank account in your name on behalf of another person, even if you know the person or are offered payment in return.
  • Never share your personal or financial information with anyone you don’t know.
  • Never respond to unsolicited emails or messages from individuals or companies asking for access to your bank account or promising money in exchange for help.
  • Always check with your bank to verify any unusual or unexpected deposits into or transfers out of your account.
  • Members of the public are also reminded to report lost or stolen identity documents to the South African Police Services (SAPS) and Southern African Fraud Prevention Service (SAFPS) to prevent criminals from opening bank accounts or accessing credit facilities under false pretences.

Read: SARS launches new tool for tax returns

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