Financial Crime World

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Common Types of Financial Scams in South Africa Exposed

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The South African Banking Risk Information Centre (Sabric) has released its annual crime report for 2019, highlighting the growing threat of financial scams in the country. The report reveals that cybercrime is on the rise, with digital banking incidents increasing by 20% and gross fraud losses on South African issued cards rising by 20.5%.

Card Fraud on the Rise

The report shows that total gross fraud losses for South African issued cards increased from R890.3 million in 2018 to R1.07 billion in 2019, with credit card fraud increasing by 16.2% and debit card fraud decreasing by 15.7%. Two-thirds of fraud on South African issued credit cards took place outside the country’s borders, while half of debit card fraud occurred within the country.

Common Hotspots for Card Fraud

Sabric identified the following hotspots for card fraud:

  • Tollgates
  • ATMs
  • Drinking places
  • Liquor stores
  • Supermarkets

In addition, Sabric found that CNP (Card Not Present) fraud accounted for 62% of gross fraud losses on South African issued credit cards.

ATM Attacks and Robberies Increase

The report also shows that ATM attacks increased by 8% in 2019, with most incidents being unsuccessful due to dye stain technology and prompt responses from ATM monitoring teams. However, the losses associated with these incidents increased by 89%.

Burglary Incidents on the Rise

Burglary incidents increased by 27%, with associated cash losses rising by 60%. Perpetrators targeted assets such as laptops, computers, face-value documents, and bank cards.

Digital Banking Scams

Phishing, Vishing, SMishing, and Email Hacking or Business Email Compromise are the most prominent fraud types affecting the digital banking space. Sabric warned that these scams often involve social engineering tactics to extract personal and confidential information from victims.

Protecting Yourself from Financial Scams

To avoid falling victim to financial scams, Sabric advises bank clients to:

  • Adopt sound practices when transacting with a physical bank card or sharing bank card details
  • Protect their personal information by sharing it selectively and on a “need-to-know” basis only
  • Be cautious of suspicious emails, phone calls, or messages that ask for confidential information

By being aware of the common types of financial scams in South Africa and taking steps to protect themselves, individuals can reduce their risk of falling victim to these crimes.