Fraud warning for South Africa – the latest scams to watch out for

[Nat Quinn]

Southern African Fraud Prevention Services (SAFPS) has raised the alarm on the increase in fraud reports it has received in the country in 2023 and highlighted the latest scams as scores of consumers continue to fall victim.

According to the Head of Projects and Development for the SAFPS, Nazia Karrim, South Africa is seeing a rise in the volume of fraud compared to last year.

“We [the SAFPS] have noted a 37% increase in the number of reported fraud incidences,” Karrim said.

She added that South Africa needs to pay more attention to fraud and scams in general, and we need to understand that it is affecting consumers who are already suffering several economic headwinds.

Concerningly, most of the fraud and scams recorded by the SAFPS are targeted towards the average consumer and not so much the big corporations or the ultra-wealthy few.

Detailing the latest scams in an interview with Newzroom Afrika, she noted that the working class – often most impacted by the harsh economic climate – are falling victim to credit loan schemes.

“Those looking for loans go out to find the best offer around with the easiest application process, only to find that they’ve applied for fake loans,” Karrim said. She noted an example of a farmer who recently lost R2.7 million through one of these loan scams.

Karrim explained that these loan scams are often “Advised fee scams”, where the fraudster will request some form of payment in terms of advisory fees, taxes, and even loan insurance fees that need to be paid upfront before the loan is granted.

However, she said under the regular loan processes, none of these fees are payable upfront. A normal credit provider would take these payments from your monthly instalment.

Karrim advises all South Africans looking to gain access a loan to do their research diligently and engage only those institutions that are registered and regulated by the National Credit Regulator.

While customers are falling victim to fake service providers, the tough economic environment has also meant that, in some cases, the roles have been reversed, where the consumer has turned to committing fraud.

Speaking with eNCA, CEO of the Insurance Crime Bureau Garth de Klerk said the cost of living crisis in the country is pushing people to commit fraud that they consider a victimless crime to free up some cash.

He explained while insurance companies are seeing an uptick in claims padding – inflation of the value of the claim – they are also seeing a concerning increase in incidence staging.

“This is quite prevalent in claims for home invasions, where individuals are claiming that their homes were broken into, listing various items of value that were stolen when, in fact, the robbery never took place,” said De Klerk.

 

source:Fraud warning for South Africa – the latest scams to watch out for – BusinessTech

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