Discovery sends a warning to loyalty programme users in South Africa

 ·20 Mar 2024

Discovery Bank has warned South Africans that criminals are taking advantage of the increasing popularity of loyalty programmes – specifically banking rewards – to defraud their unsuspecting victims.

Earlier this month, Discovery Bank sent a fraud alert to its consumers, warning them of popular scams making the rounds in South Africa, which it also picked up across its footprint.

The scams mentioned included fraudsters impersonating the banks, the “post office scam”, and “the loyalty programmes scam“.

The first involves the criminals pretending to be the bank, alerting the victim that a fraudulent transaction has taken place, and they need to verify the account details to reverse the transaction.

The second is when the fraudsters try to target those waiting for a package at the South African Post Office, saying they need to pay a fee to clear their package for delivery.

The third one, however, is relatively new, and Discovery explained what South African banking clients should watch out for to avoid being a victim of the loyalty programmes scam.

Scammers exploiting the popularity of loyalty programmes will send you a message claiming that your loyalty programme points are about to expire, and to redeem them, you must follow the link provided in the message,” it said.

“Once you click on the link, you’ll be taken to a fake website to enter your account details or card details and then the OTP – under the pretence of redeeming your loyalty points.

“However, instead, you’re unknowingly authorising fraudulent transactions,” the bank warned.

This warning is notable given the popularity of loyalty programmes in South Africa, which also include banking rewards.

According to market research firm BrandMapp and consultancy Truth’s 2023/24 Loyalty Whitepaper, 76% of South Africans now use a loyalty programme in some capacity, up three percentage points from the 2022/23 survey.

Among respondents, around 30% indicated that they were using loyalty programmes more over the past year – echoing findings from analysts, debt councillors and the banking sector, where they pointed to South Africans becoming more reliant on different ways to counter the rising cost of living in South Africa.

Although retail programmes such as Checkers Xtra Savings, Clicks ClubCard, and Pick n Pay Smart Shopper were the most popular programmes, banking rewards are still featured.

For example, FNB eBucks was the only non-retail loyalty programme within the top 10 most-used loyalty programmes.

However, despite not listing in the top 10, Discovery Miles/Vitality, Absa Rewards, Capitec Live Better, Standard Bank UCounts, and Nedbank Greenbacks were among the top 25.

Read: South Africa’s big banks are hiring – these are the jobs they’re looking to fill in 2024

Show comments
Subscribe to our daily newsletter