Capitec warns about fraud and scams targeting customers in South Africa

Banking fraud and scams are becoming increasingly prevalent, and fraudsters are using more sophisticated tactics and taking advantage of social media.

According to the Southern African Fraud Prevention Service, fraud incidents have surged 32% this year, and impersonation fraud victims have increased by 54%. 

“The digital landscape is increasingly being exploited by sophisticated scammers targeting investors,” René Basson, Head of Brand at Satrix, warned. 

“With the rise of fake investment platforms and social media impersonations, it’s crucial for South African investors to remain vigilant.”

BusinessTech spoke to Capitec to hear what the most common types of banking scams they are seeing are at the moment. 

“The most prevalent scams targeting consumers include authorised push payment fraud, where victims unknowingly initiate payments to fraudsters,” the bank said. 

“This type of scam is leading to significant financial losses.”

Investment scams and Ponzi schemes are other common threats to consumers. 

“Fraudsters promise high returns with minimal risk, often leading victims to invest in schemes that are not legitimate,” Capitec said. 

This fraud occurs when scammers trick people into putting money into fake or misrepresented investments, such as stocks, bonds, or real estate. 

Fraudsters often pose as financial advisors or telemarketers, presenting themselves as trustworthy and pushing for quick decisions by creating a sense of urgency. 

Their goal is to earn your trust and get you to invest without asking too many questions.

Ponzi schemes are a type of investment scam where a scammer promises that they will invest your money and earn you large payouts.

However, these returns are paid using money from newer investors, not profit earned.

Similar to pyramid schemes, Ponzi schemes depend on a constant supply of new “investors”. 

Goods and services scams are also prevalent at the moment, Capitec said. 

“Victims pay deposits or full amounts for goods or services that are never delivered.”

These scams tend to increase during events like Cyber Monday and Black Friday and often include deals which seem too good to be true.

Capitec also warned against advance fee scams.

“These scams require victims to pay a fee upfront for a job, loan, prize, or inheritance that doesn’t exist. This includes job scams, often via platforms like WhatsApp and Telegram.”

“Victims are lured by offers of easy money through simple tasks but end up paying fees to scammers.”

Stephen Schneider, Associate Professor in the Department of Sociology and Criminology at Saint Mary’s University, explained that this fraud often involves fake solicitations from people posing as business representatives or government officials. 

They promise large amounts of money (usually millions) to be deposited into the target’s bank account. The victim is asked to pay a processing fee, typically via wire transfer, before receiving the funds. Once the fee is paid, the perpetrators disappear, and no money is transferred.

These scams may exploit situations like civil wars, inheritance claims, or government fraud, making the victim believe the funds need to be secretly moved. 

Ultimately, though, no goods or money are ever delivered to the victim, Schneider said. 

Finally, Capitec warned consumers to watch out for Work-from-Home (WFH) scams. 

“Scammers trick victims into making multiple payments under the guise of investing or trading, often referred to as “Pig Butchering.”

According to Indeed, there are seven things that job-seekers can look out for to determine whether a job is a WFH scam:

1. The job is too good to be true.
2. There is little information on the company.
3. A second contact cannot confirm the legitimacy of the job offer.
4. There are warnings online.
5. The employer is overly eager to hire.
6. You have to pay to work.
7. The employer communicates poorly.

Prevention

While these banking scams may be increasing in frequency, there are still things that consumers can do to protect themselves.

Below is Capitec’s advice for how people can avoid these threats.

• Be sceptical of offers that seem too good to be true, especially those promising quick or high returns. If it sounds too good to be true, it likely is.
• Avoid paying upfront fees for jobs, loans, or prizes. Reputable companies will not ask for such payments.
• Research any investment opportunities thoroughly and ensure they are offered by authorised financial service providers.
• Exercise caution with bargains on Facebook Marketplace and always meet in person in a safe, public location if exchanging goods.
• Do not click on links in unsolicited messages asking for personal or banking information, and be wary of requests for personal details or payments from unknown sources.
• Verify the source of calls or messages claiming to be from your bank or other trusted entities. Use official contact numbers and check your bank’s verified social media accounts.

“Capitec remains committed to educating South Africans about various scams. Our MoneyUp Chat game, Slam the Scam, offers interactive, practical examples to teach users about scam tactics and how to avoid them.” 

“You can access MoneyUp Chat via WhatsApp at 087 240 5757,” the bank said.

Read: New South African bank targeting Capitec already has 1 million customers and mobile products