Warning about big banking scam shift in South Africa By Myles Illidge

The South African banking industry has observed an uptick in clients being cheated by fraudsters posing as bank officials, tax officials, or investment companies. Scammers have also adjusted their habits in the face of banks clamping down on fraud.

Standard Banked warned that vishing — or phishing via phone calls — has become the most significant contributor to app banking, digital banking, and card-related fraud.

“Unlike phishing scams, which deceive people into clicking on links in texts and emails, vishing calls trick people into sharing sensitive banking information or taking actions that compromise the security of their bank accounts,” it said.

According to Standard Bank, scammers tend to target older people approaching retirement or who have recently received their cash payouts, proposing high-return investment opportunities.

This includes persuading victims to transfer their funds into fictitious investment accounts.

Some scammers use another approach and attempt to create panic by claiming that the victim’s bank account is vulnerable and urging them to move their money into a “safekeeping” account.

According to Standard Bank’s head of digital and e-commerce, Belinda Rathogwa, the bank will never call clients to request that they transfer money into an account that isn’t theirs.

“If you are going to invest your hard-earned money, verify the details of the investment company that you are dealing with. Check that they are registered with the Financial Services Conduct Authority (FSCA),” she added.

She noted that fraudsters convince victims to keep quiet and not share details about the fraudulent transactions with their banks or loved ones, hoping to avoid early detection.

“This social engineering tactic leaves little recourse for consumers, so that many are unable to recover all of their lost funds and most don’t recover any of their money, even with their bank’s assistance,” says Rathogwa.

She said scammers have shifted to social engineering techniques over the phone as banks have increased risk controls to prevent unauthorised account access. This forced fraudsters to find new ways to trick banking clients.

Standard Bank has launched a security feature designed to address this threat. The Mobile Banking App now alerts clients to potential vishing threats.

Customers can activate the feature and provide consent to be notified of suspicious calls.

“Our data shows that a growing number of older clients make use of our app. Any additional security features on the app can therefore play a big role by protecting them,” said Rathogwa.

South Africa’s online system for reporting scams and fraud

In May 2023, the South African Fraud Prevention Service (SAFPS) announced that it was working on an online system for people in the country to report scams, secure their personal information, and scan websites for vulnerabilities.

“In response to the growing need for a proactive approach to fraud prevention, the SAFPS is developing a product called Yima,” said SAFPS product development head Nazia Karrim.

Dubbed Yima, the system went live in September 2023. It also provides information on different types of scams, including vishing, and the steps South Africans can take to prevent themselves from becoming victims.

In its initial announcement, the SAFPS shared the story of Ms Jones, who nearly fell victim to a vishing scam that could have cost her dearly.

However, she became wise to the caller’s intentions when they became frustrated with her questions and threatened to disconnect her service immediately if she did not comply.

“Many South Africans would have panicked and given in to the scammer’s demands,” said Karrim.

“This exchange is just one of the many examples of how Yima will make a significant difference in educating the consumer about the tactics used by scammers to pressure them to comply with the demands and, in the process, fall victim to the scam.”

“In the future, Ms Jones will be able to report this incident on Yima and have direct access to her mobile provider and banks to alert them of the issue via the scams’ hotline,” she added.

SOURCE:Warning about big banking scam shift in South Africa – MyBroadband