Discovery Bank fraud warning

Discovery Bank has warned about the rise in fraud cases in South Africa, issuing an alert to banking clients that scammers are increasingly impersonating banking officials. 

The bank cautioned customers about a surge in scams where criminals pose as bank officials to steal sensitive information. 

Discovery Bank said these scammers often call, pretending to be from a bank’s fraud team. They claim there are suspicious transactions on the account and pressurise victims into revealing their card details.

In a message to clients on its mobile app, the bank emphasised that no legitimate bank will ever ask for full or partial card details to confirm or reverse a transaction, or to process a refund. 

“Scammers call pretending to be from the bank’s fraud team, pressuring you to share your card details by claiming fraudulent transactions on your account. Banks will never ask for your full or missing card details,” the bank said.

This warning aligned with the findings of Discovery Bank’s SpendTrend25 report, conducted in partnership with Visa. 

Based on a public survey of 1,000 high-earning South Africans who actively use credit cards, the report reflected growing public concern about digital security and fraud. 

The study found that over 60% of respondents are more concerned about banking security now than they were a year ago, and 63% said they have either personally experienced card fraud or know someone who has. 

A staggering 76% reported receiving scam messages via email, SMS, or phone calls. Despite the rise in fraud attempts, trust in banks remains high. 

According to the report, 86% of respondents consider fraud protection from their bank essential, and 80% are confident in their bank’s ability to safeguard their money. 

However, the increasing sophistication of scams has driven more people to prioritise safer payment methods, with digital wallets and virtual cards gaining traction for their added security features.

Virtual cards are emerging as a preferred option. These cards are stored within secure apps and cannot be physically stolen or cloned, making them less vulnerable to fraud. 

According to the SpendTrend25 survey, 45% of participants already use a virtual card, and others own one but haven’t adopted it into their regular spending habits. 

Millions stolen from South Africans

Discovery Bank’s findings echo a broader trend highlighted by the South African Banking Risk Information Centre (SABRIC). 

According to Sabric’s latest annual crime statistics, card fraud in the country increased by 9.1% from 2022 to 2023, with total losses jumping from R414 million to R452 million. 

The most significant portion (over 80%) was card-not-present (CNP) fraud, which occurs when stolen card information is used to make online or remote purchases without the physical card.

Sabric reported that CNP fraud increased by 18.4% year-on-year, amounting to R338.5 million in losses. 

Another growing threat is lost and stolen card fraud, which accounted for 11.7% of all card fraud cases and surged by 26.9% to nearly R49 million. 

These figures underscore fraudsters’ evolving tactics, who now primarily exploit customer vulnerabilities rather than directly targeting banking systems.

The Banking Association of South Africa (BASA) has echoed these concerns. It noted that many fraud cases result from criminals intercepting validly issued cards before they reach their intended recipients. 

Once in possession of these cards, fraudsters can carry out transactions using legitimate customer accounts.

Discovery Bank advised that customers take several proactive steps to minimise risk: switch to virtual cards where possible, enable tap-to-pay features only within secure digital wallets, and set PIN-required limits on physical cards. 

The bank also recommended monitoring account activity closely by turning on transaction alerts. Never approve transactions you didn’t initiate, or share personal or card information over the phone, even if the caller appears to be from your bank.

Discovery Bank added that while banks continue to enhance security systems, consumers must remain alert and informed to protect themselves from financial crime.