End-of-year bank scam warning for South Africa
Christmas is approaching, bringing excitement for South African workers – and scammers.
According to the Southern African Fraud Prevention Service (SAFPS), scammers often take advantage of the increased shopping activity linked to the December break.
“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,” said Roy Retief, Head of Operations at SAFPS.
Although scammers often devise new methods to trick their victims, the most common scams follow a set formula.
“Impersonation fraud is rife when it comes to banking scams,” said Retief.
Scammers often contact victims posing as bank representatives.
These scammers have a host of information about their potential victims, with victims then sharing their banking details and other sensitive information like 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,” said Retief.
“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.”
Another technique also sees scammers telling potential victims to move money into a safer or higher-interest-bearing account, where the victim moves money into the scammer’s account.
Crime is rife
Nerosha Maseti, Lead Ombudsman for the banking Division of the National Financial Ombud Scheme (NFO), said that banking scams are the most common cause of formal complaints opened at the NFO’s banking division.
“In 2023, of the 8521 formal cases which were opened at the Ombudsman for Banking Services for the year (being the predecessor to the banking division of the NFO), 3380 or 43.47% were categorised as fraud,” said Maseti.
With the volume of digital payments increasing, fraudsters are far more creative in finding new ways to steal from banks and their customers.
“Banks globally and within our jurisdictions are seeing an increasing trend in scams. Fraudsters are manipulating and coercing customers into making payments to them, bypassing bank controls,” said Maseti.
She said the investigations will try to determine whether the bank was involved in any issue, such as wrongdoing or negligence, that led to customers’ losses.
The investigation shows that the bank could have prevented or mitigated the customer’s losses but failed; the bank may be told to refund some of the customer’s losses.
“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.”
“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.”
How to not be scammed
That said, consumers must remain vigilant and aware as they are ultimately responsible for account transactions.
Customers can prevent being scammed if they consider the following:
- “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 whilst outside venues waiting for e-haling services, where it is easy for a criminal to snatch your mobile device whilst your banking app is unlocked and
- Do not access your banking app or perform sensitive financial transactions whilst connected to unsecured public wi-fi networks.”
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