More South Africans are falling for banking scams

A new wave of fraud is targeting bank customers and the number of people falling victim to the scammers is increasing too, the ombud for banking services said in a consumer alert on Friday.

Banking fraud has become a very lucrative business for online scammers, ombud Reana Steyn said.

The banking fraud matters investigated by her office in 2021 alone — the amounts claimed as losses by the victims of the various types of banking scams — exceeded R295m.

“This is an extremely worrying trend, especially when considering that these funds are mostly lost by individuals and small businesses who, in the majority of cases, are not in a financial position to suffer any kind of financial setback. In addition to the negative effects of Covid-19 on finances, most of these victims will sadly never be able to recover from these financial losses,” said Steyn.

The ombud said in most of these cases, the amounts that were claimed were not recovered as they had already been withdrawn by the fraudsters. 

She said the losses were largely due to the victims falling for typical and well-publicised scams.

According to the OBS’s 2021 records, the ombud received and investigated more than 2,880 banking fraud-related cases. This was a significant increase — 7.5% — in the fraud cases that were investigated in 2020.

Most of these matters were due to bank customers falling victim to internet banking fraud, credit card fraud, current account fraud and ATM card swap scams.

The basic modus operandi of these scams is not new. However, over the years, there is a constant change in the execution techniques that fraudsters have applied. “The success of these scams, and their evolution, is heavily guided by how the consumer will react in each situation,” she said.

How to protect yourself

• Know that banks will never ask you to confirm your confidential banking information over the phone;
• If you receive a phone call requesting confidential or personal information, do not respond and end the call. Contact your bank’s fraud hotline immediately;
• If you receive an OTP on your phone without having made a transaction, it is likely that it is a fraudster who has used your personal information. Do not provide the OTP to anybody. Contact your bank’s fraud hotline immediately;
• Do not click on links or icons in unsolicited emails or SMSs.
• Do not make payments into an unknown person/merchants’ account without first verifying their authenticity. If you are unsure, go to your nearest bank branch and speak to a representative;
• When doing online shopping, only use your card to make payments on secure websites;
• While transacting, always keep an eye on the ATM card slot to ensure that your card is not removed, skimmed and replaced without your knowledge;
• Report lost and stolen cards immediately.
• Be alert to your surroundings. Do not use the ATM if there are loiterers or suspicious people in the vicinity. Also, take note that fraudsters are often well-dressed, well-spoken and respectable looking individuals;
• Key in your PIN in such a way that no-one else can see it — cover your PIN when punching in the numbers even when alone at the ATM, as some criminals may place secret cameras to observe your PIN;
• Do not let anyone stand too close to you to keep both your card and PIN safe.