Industry regulating bodies and the police are cautioning the public to be on the alert following a sharp increase in fraud cases.
Compared to last year’s figures, Claremont Police Station states it has experienced a 29% increase in reported fraud cases while Wynberg Police Station states not a week goes by without a fraud case being opened at the station.
A media statement released by the Claremont police and Claremont Community Policing Forum (CPF) earlier this month, stated that an analysis of fraud cases opened at the police station found that 40% were online purchasing, 40% were online banking or calls from imposters claiming to be bank representatives, 10% were so-called “Tinder Swindler” scams (con-artists known to the victim) and 10% were in-house corporate fraud/white-collar crime.
At Wynberg a large number of reported fraud cases involved vishing and phishing.
Vishing is when a fraudster, impersonating a bank official, seeks to have a conversation with the victim to persuade them to give away sensitive information. Phising occurs when emails, purporting to be from reputable companies, induce individuals to reveal personal information.
Capt Silvino Davids, spokesperson for Wynberg police, says these emails entice recipients to respond by claiming they have won a prize or that there is money owed to them.
“Once they hack your email, it is too late,” says Davids.
He says another scam they see almost daily involves fraudsters advertising vehicle sales on social media.
“Claiming that there is lots of interest in the vehicle, ‘sellers’ ask the ‘buyers’ to transfer a deposit into their bank account to secure the sale. Once the money is paid, the ‘sellers’, along with their fake social media account, just disappear,” says Davids.
While Covid-19 acted as a catalyst for e-commerce in South Africa, growth in online shopping is set to accelerate even further, according to a Deloitte study (“Digital Commerce Acceleration Increased online purchases present new opportunities for digital commerce players”, February 2021)
It is estimated that by 2024, 32 million consumers will shop online.
Jane Chamberlin, spokesperson for the Claremont CPF, says the spike in online fraud should be seen in context. “Covid-19 was certainly cause for a global spike in online transacting, so perhaps this increase in local fraudulent activity is not as alarming as it appears. But we do need to address it”.
According to Lt Col Marnus Fourie, Vispol Head for Claremont police, online purchasing fraud tends to take two forms.
“In one scenario, payment is made by the complainant but goods or services are never delivered, and the company and scammer simply disappear. In the second scenario, the invoice sent for payment is intercepted before it reaches the purchaser. Bank details are subsequently changed so payment, when made, is diverted to the scammer.”
Lauretta Ngakane, Head of Communication, Ecommerce Forum South Africa (EFSA), says the body is aware of the perceived increase in online fraud.
EFSA, a forum for all players in the ecommerce industry, works closely with the Consumer Goods and Services Ombuds CGSO, which deals with consumer complaints.
Ngakane says CGSO recorded a 300% increase in complaints received within the Covid-19 lockdown period.
She says these appear to fall into three categories, with the first being outright fraud. The second is the slow delivery of goods and the third is consumer impatience.
EFSA is working on a verification system that would give consumers trust in the e-shops they use.
“We warn against rushing into a purchase without checking the seller or buying a product at a ridiculously low cost,” she says.
Chamberlin says banking-related scams are often extremely convincing.
“Victims report having received a call from the bank, advising of fraud on their bank account. The caller requests the complainants to log onto their online banking profile or to provide login details. As soon as the one-time-password (OTP) is generated, the bank account is emptied,” she says.
Fourie adds in some cases, automated telephone bank messages with a prompting menu is used.
“After pushing a button, funds have disappeared from the victim’s account,” he says.
Nischal Mewalall, CEO of South African Banking Risk Association (Sabric), says vishing is a very common tactic.
Sabric’s Annual Crime Stats 2020 shows a 33% increase in digital banking fraud across all platforms with 35 307 incidents recorded in 2020 compared to 26 567 in 2019.
Mewalall says Sabric has seen an increase in this type of crime being committed.
“If vishing and phishing efforts are successful, it then correlates with the high number of crimes on a bank’s digital platforms, because the fraudster uses the unlawfully obtained data to impersonate the victim and access funds or make purchases in the victim’s name,” says Mewalall.
According to Mewalall, every bank has its own process when it comes to dealing with a bank customer that has been defrauded.
“The bank may or may not refund a customer, depending on the merits of the case. If it is proven that the bank customer was negligent, the bank will not refund the customer,” he says.
Fourie says the majority of online banking fraud cases, it is the elderly or those less tech-savvy who fall prey to these criminals.
“The scammers are often based overseas and are notoriously difficult to trace.”
- EFSA has a guide for consumers on its website: www.ecomafrica.org
