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Warning over new ‘resolution’ scams in South Africa
People motivated to change in the new year are more vulnerable to scams, especially with the rise of new types of scams exploiting various new technologies.
According to the 2023 South African Banking Risk Information Centre (SABRIC) report, account takeovers resulted in losses of R93 million in 2023.
Standard Bank Head of Fraud and Risk Management Athaly Khan explained that scammers target many people at the beginning of the year, looking to take advantage of “times of self-improvement”.
People are highly vulnerable to scams when motivated to make changes and are distracted.
This is often a time when people are reconsidering their investment choices, so there are many investment scams. However, education and health and fitness scams are also rampant at the start of the year.
The fraudsters often pose as financial institutions or financial service providers, emulating legitimate institutions, which makes them challenging to identify.
Additionally, scammers fake celebrity endorsements and testimonials.
Maya Fisher-French reported that a pensioner was targeted in a scam where the scammers posed as SAA.
The victim was looking to buy aeroplane tickets when he saw an advertisement for SAA tickets at a discount.
After expressing interest in the product, the scammers contacted him on WhatsApp and told him to download the SAA app.
The link downloaded malware onto his phone and completely took it over. The scammers gained access to his bank accounts and made payments to third parties within minutes.
He lost R177,000, but Fisher-French said that the banks could not get the money back.
If the scam is reported to the banks early on, then the victims have the right to claim that the banks did not act fast enough to block the transaction and take it to the Ombudsman.
However, in many cases, banks cannot return the money to victims if the crime is reported too late. Banks might offer some compensation as a form of goodwill.
Furthermore, banks say that they already take many measures to ensure that transactions are legitimate, such as using OTPs and facial verification.
However, Khan admits that banks have difficulty keeping up with scammers and fraud due to all the new technologies available, like AI.
The variety of technologies available to be abused has also given rise to many new types of scams.
The best banks can do is to raise awareness about scams among their users.
Khan and Fisher-French described some tell-tale signs that something is a scam.
Scammers often promise high returns with little effort. It is uncanny for a company to ask you to put a small amount in and receive a high return on your investment, said Khan.
Additionally, scammers would provide investment options unsolicited.
Scammers would also create a sense of urgency through a short timeline or limited stock to get into the scam. The timeline will be too short to properly ask questions and determine how everything works.
Additionally, scammers often require an upfront payment and request that people share sensitive information, which a legitimate institution would not do, said Khan.
Khan said legally, more can always be done to catch scammers, however, the rapid pace at which things change does not make it particularly feasible.
source:Warning over new ‘resolution’ scams in South Africa – BusinessTech
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