Industry regulators and police are warning the public to be on alert following a sharp rise in fraud cases.
Compared to last year’s figures, Claremont Police Station says it has seen a 29% increase in reported fraud cases, while Wynberg Police Station says not a week goes by without a fraud file is opened at the station.
A press release issued by Claremont Police and the Claremont Community Policing Forum (CPF) earlier this month said an analysis of fraud cases opened at the police station found that 40% were purchases in line, 40% were online banking or calls from imposters pretending to be bank representatives, 10% were so-called “Tinder Swindler” scams (scammers known to the victim) and 10% were business fraud /internal white-collar crimes.
At Wynberg, a large number of reported fraud cases involved vishing and phishing.
Vishing occurs when a fraudster, posing as a bank official, seeks to have a conversation with the victim to persuade them to divulge sensitive information. Phishing occurs when emails claiming to be from reputable companies trick people into revealing personal information.
Capt. Silvino Davids, spokesperson for Wynberg Police, says these emails prompt recipients to respond by claiming they’ve won a prize or are owed money.
“Once they hack your email, it’s too late,” says Davids.
He says another scam they see almost daily involves scammers advertising the sale of vehicles on social media.
“Pretending there is a lot of interest in the vehicle, the ‘sellers’ are asking the ‘buyers’ to transfer a deposit to their bank account to secure the sale. Once the money is paid, the ‘sellers’, along with their fake social media accounts, simply disappear,” says Davids.
While Covid-19 has acted as a catalyst for e-commerce in South Africa, the growth of online shopping is set to accelerate further, according to a Deloitte study (“Digital Commerce Acceleration 2021)
It is estimated that by 2024, 32 million consumers will shop online.
Jane Chamberlin, spokesperson for the Claremont CPF, says the surge in online fraud must be seen in context. “Covid-19 has certainly caused a global spike in online transactions, so perhaps this increase in local fraudulent activity is not as alarming as it sounds. But we need to remediate “.
According to Lt. Col. Marnus Fourie, head of Vispol for Claremont Police, online shopping fraud tends to take two forms.
“In one scenario, payment is made by the complainant but the goods or services are never delivered, and the company and the scammer simply disappear. In the second scenario, the invoice sent for payment is intercepted before it does not reach the buyer.The bank details are then modified so that the payment, once made, is diverted to the scammer.
Lauretta Ngakane, Communications Manager, 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 e-commerce industry, works closely with the Consumer Goods and Services Ombuds CGSO, which handles consumer complaints.
Ngakane says CGSO recorded a 300% increase in complaints received during the Covid-19 lockdown period.
She says these seem to fall into three categories, the first being outright fraud. The second is slow delivery of goods, and the third is consumer impatience.
EFSA is working on a verification system that would give consumers confidence in the online shops they use.
“We don’t recommend rushing into a purchase without verifying the seller or buying a product at a ridiculously low price,” she says.
Chamberlin says bank scams are often extremely convincing.
“The victims report having received a call from the bank, informing them of a fraud on their bank account. The caller asks the complainants to log into their online banking profile or provide login information. As soon as the one-time password (OTP) is generated, the bank account is emptied,” she says.
Fourie adds that in some cases, automated telephone banking messages with a prompt menu are used.
“After pressing a button, the funds disappeared from the victim’s account,” he says.
Nischal Mewalall, CEO of the South African Banking Risk Association (Sabric), says vishing is a very common tactic.
Sabric’s 2020 annual crime statistics show a 33% increase in digital bank 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, then this correlates to high crime rates on a bank’s digital platforms, as the fraudster uses the illegally obtained data to impersonate the victim and gain access to funds or make purchases on behalf of the victim,” Mewalall says. .
According to Mewalall, each bank has its own process when it comes to dealing with a bank customer who has been the victim of fraud.
“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 reimburse the customer,” he says.
Fourie says the majority of cases of online banking fraud fall prey to these criminals.
“The scammers are often based overseas and are notoriously difficult to track down.”
EFSA has a guide for consumers on its website: www.ecomafrica.org
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