Fraudulent Transactions in South African Banks Soar as Criminals Use Social Engineering Techniques

Despite a decline in reported incidents of non-contact banking fraud, gross losses have increased by 45% in South Africa, according to the latest annual report from the South African Banking Risk Information Centre (Sabric).

The Rise of Gross Losses

While there was an 18% decrease in reported incidents since 2020, mainly attributed to a reduction in mobile banking fraud incidents, the total amount of money defrauded increased from R310 million to R440 million. This is a significant concern for both banks and customers.

Online Banking Fraud: A Growing Concern

Online banking fraud accounts for the second-highest portion of gross losses, with an average loss per incident of around R33,781. The report highlights the importance of being vigilant when conducting online banking transactions, as criminals are exploiting the widespread use of digital banking channels to commit fraudulent activities.

Social Engineering Techniques Used by Criminals

Criminals are using various methods to commit fraudulent transactions, including:

• Vishing: Scamsters impersonating bank officials or service providers over the phone
• Phishing: Sending emails with links to fake websites designed to look like legitimate bank sites
• Smishing: Similar to phishing but conducted over mobile phones
• SIM Swapping: Interceptor transaction verification tokens and subsequently access funds or validate transactions

The report noted that SIM swaps increased by 63% compared to the previous year, making it a popular method among criminals.

Staying Safe

Sabric urges bank customers to be cautious when sharing personal and confidential information and to treat requests for such information with suspicion. The organisation warns that fraudsters are using social engineering techniques to manipulate victims into disclosing sensitive financial details.

To avoid becoming a victim of fraudulent transactions, it is essential to:

• Be vigilant when conducting online banking transactions
• Verify the authenticity of emails, phone calls, and text messages from banks or service providers
• Keep personal and confidential information secure
• Report any suspicious activity to your bank or Sabric

By being aware of these tactics and taking necessary precautions, you can reduce the risk of falling victim to fraudulent transactions.