Capitec CEO warns of banking fraud and kidnapping nightmare in South Africa

[Nat Quinn]

Capitec CEO warns of banking fraud and kidnapping nightmare in South Africa

 

Capitec CEO Gerrie Fourie warned that banking fraud in South Africa is a “nightmare” that affects everyone, and a more dangerous type of fraud has started to emerge.

At a recent Media Day event, Fourie was asked about the increased instances of banking fraud in South Africa, with Capitec’s name often coming up when the topic is mentioned.

“It’s a nightmare for everyone. It’s not only us – fraud is massive,” he said.

Fourie explained that the bank is investing a lot of money and resources to secure and protect its systems. “That’s our number one focus,” he said.

However, he warned that a problem arises when a banking system “tightens everything up”, as fraudsters then turn to force to get what they want.

One concerning trend that’s recently become more prevalent is kidnappings, whereby kidnappers forcibly access their victim’s banking details.

The banking division of the National Financial Ombud Scheme (NFO) recently announced that it has received several complaints relating to kidnappings where consumers disclose their confidential banking information under duress.

“When investigating kidnapping-related complaints reported to the NFO, it has been identified that criminals force the banking customer to disclose their online banking and banking app passwords under the threat of violence after kidnapping and detaining them,” said Nerosha Maseti, Lead Ombudsman of the NFO’s Banking Division.

“Once criminals gain access to these platforms, they can alter account limits and make unauthorised transfers leading to significant financial losses in addition to the trauma of the kidnapping itself.”

The NFO’s banking division has the power to recommend to the bank that it refund the portion of the customer’s losses that could have been prevented but for the bank’s negligence.

That said, the NFO can do little if the victim gives the all-clear to the bank while under duress.

Fourie explained that Capitec struggles with this, as the bank cannot be held liable for a client’s actions.

Capitec will monitor the transactions in situations like kidnapping and alert clients if any abnormal transactions are made. “But if they do normal transactions, we can do nothing,” he said.

“We send an SMS or Whatsapp notification to you for every single transaction, where you, as a client, must contact us to either stop your card or stop your app because the people have access to it,” he said.

However, if clients do not alert the bank of the situation, the bank cannot do anything to prevent or help its clients.

Other types of fraud also prove problematic for banks in terms of liability.

Fourie explained that investment scams are also becoming increasingly prevalent, and clients often attempt to hold the bank liable for their mistakes.

“People go on websites with no background and then pay for things, and then suddenly it doesn’t get delivered,” he said, adding that some clients expect the bank to refund them.

“We can’t because we can’t control your behaviour, but a massive amount of education work needs to be done.”

He said banks and the media have a responsibility to educate South Africans on how to keep their money and accounts safe.

Capitec’s Group Executive of Marketing and Communications, Francois Viviers, said the bank has invested significant time and resources into communication on its platforms to help educate clients on topics like fraud.

“We’re actually also spending marketing money on educating clients because it is that important. This is not a Capitec problem, this is a South African problem,” he said.

In early August, Capitec told Daily Investor that it had seen a significant global increase in the frequency and sophistication of scams across the industry, echoing warnings sent by other major banks, including Standard Bank, FNB, and Nedbank.

Capitec provided several practical steps the bank’s clients can take to safeguard their finances:

• Stay informed: Leverage Capitec’s educational resources by using its tools, including its MoneyUp Chat Slam the Scam Challenges, where you can learn about scam tactics and how to avoid them through interactive practical examples. Additionally, the bank’s Fraud Centre on the Capitec website provides extensive information, including the latest scams and how to avoid them.

• Practice safe digital habits: Always access Capitec’s official website or app directly. Be cautious of public Wi-Fi when banking, and always log out completely after each session. Remember, your bank will never ask for your password, PIN, OTP, or Card details via email, phone, or text. A benefit of digital banking is 24/7 access to your transactional information, allowing you to review your accounts and transaction history day or night. However, please don’t hand over your cellphone device or SIM card to someone you don’t know; they might be trying to gain unauthorised access to your banking app.

• Act fast: Report any suspicious activities or potential scams to Capitec immediately.

• Be cautious online: Avoid clicking on links in emails and messages claiming to be from Capitec asking you to share personal or banking information. Examples include courier scams asking you to pay an outstanding fee or update your information to receive a delivery. These links are malicious and designed to steal your information and money.

• Verify Capitec messages and phone calls: Scammers impersonate banks and other trusted service providers. If you receive a call from someone claiming to be from your bank’s fraud department, remember that your bank will never call and ask you to authorise or perform a transaction to stop or reverse fraud or a debit order. Capitec now has a verification feature in its banking app that lets you verify whether you are talking to a Capitec agent by signing into the app while on a call. Hang up if a call sounds suspicious, and call your bank or service provider on their official number.

• Know how to identify scams: If it sounds too good to be true, it’s probably a scam. Watch out for promises of unbelievable investment returns, bargains on Marketplace and unknown brands. Stick to what you know and do your research. Also, never pay an upfront fee to get a job, loan, pet or prize money. Legitimate companies won’t ask you this. Beware of messages on platforms like WhatsApp and Telegram with offers to make easy money through simple tasks like following and reviewing brands.

• Strengthen your passwords: Use strong PINs that no one can guess, and never share your PINs or OTPs with anyone. Avoid using your date of birth as your PIN, and never save your PIN in a note on your phone; instead, use a password protector. If available, rather use biometrics to access your banking apps.

South Africans should remain alert and be on the lookout for fraudsters trying to steal their hard-earned money.

 

source:Capitec CEO warns of banking fraud and kidnapping nightmare in South Africa – Daily Investor

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