Financial Scams on the Rise in South Africa

Despite a decrease in reported incidents of non-contact banking fraud, gross losses have increased significantly, with cybercriminals exploiting social engineering techniques and targeting online banking users.

Rise in Gross Losses

According to the latest annual report from the South African Banking Risk Information Centre (Sabric), there was an 18% drop in reported incidents since 2020, but a 45% increase in gross losses, from R310 million in 2020 to R440 million in 2021.

Targeting Online Banking Users

The biggest draw of money for cybercriminals has been abusing the fact that most people now bank online. Sabric noted that online banking fraud makes up a small portion of incidents of digital crime, but amounts to the second-highest portion of gross losses. On average, the amount of money defrauded from people was around R33,781.

Common Types of Scams

Sabric highlighted several common types of scams and modus operandi being used by cybercriminals:

Vishing

• Scamsters phone a victim, impersonate a bank official or service provider, and use social engineering skills to manipulate the victim into disclosing confidential information.

Phishing

• A scammer sends an email to a prospective victim, encouraging them to click a link that directs them to a fake website designed to look like a legitimate bank website.

SIM Swapping

• Criminals intercept transaction verification tokens by diverting one-time pins (OTPs) and random verification numbers (RVNs) through a unsuspecting bank client’s mobile service provider.

Smishing

• Similar to phishing, but conducted over the mobile phone. Fraudsters send a text message requesting the victim to call a number or click on a link to reveal their confidential banking information.

Protecting Yourself from Scams

In light of these scams, Sabric urges bank customers to treat requests for personal and confidential information with suspicion and use their discretion when sharing this kind of information.