Online banking fraud increases 64%

There has been a steep increase in fraud on banks’ digital platforms, says the SA Banking Risk Information Centre.

There has been a steep increase in fraud on banks’ digital platforms, says the SA Banking Risk Information Centre (Sabric).

Sabric released statistics on digital banking crime for the first time on Thursday, which reveal a 64% rise in incidents to 13,438 this year.

Online fraud on digital platforms now accounts for 55% of all digital banking crime losses reported to Sabric, said the centre’s CEO Kalyani Pillay.

The first release of data on crimes on app, mobile and online platforms reveals they affected more than 13,000 consumers in 2017 and cost the industry just more than R250m.

Mobile banking fraud accounted for 5,719 of the 13,438 incidents reported to Sabric in 2017. Banking app fraud occurred in 4,836 incidents and online banking fraud amounted to 2,883 incidents. Online banking fraud cost just under R170m, while that of banking apps cost R57m. Mobile banking fraud cost R22m.

Pillay said while banks were doing everything to make banking accessible and convenient, consumers were also becoming more vulnerable to criminals.

Prominent digital crimes include phishing, smishing and vishing. Smishing relates to SMS fraud, vishing relates to voice mail and phishing to e-mail. Criminals use these platforms to either pretend to be someone from a bank, or get personal banking details such as PINs and passwords.

“Criminals use social engineering tactics to manipulate people into providing information they require in order to commit the crime,” she said.

Criminals make it easy for people to believe fraudulent communications “that are couched in such a way that you get taken in”.

She said people are often prompted to act when panicked, such as when they receive an SMS saying there has been a fraudulent transaction on their account, or an e-mail saying a bank account will be frozen.

“This is what criminals want, and in our attempt to safeguard our accounts we inadvertently give criminals the personal details they require to commit fraud,” Pillay said.

SIM-card swaps also give criminals an opportunity to obtain personal information. In some cases when a SIM-card is swapped criminals can access a phone number and use it to download a banking app and transact on an account.

Pillay said e-mail spoofing is another form of fraud where a person pretends to be someone else — the manager of a store or a service provider where you have an account, for example.

The fraudster advises you of a change in bank account details, and when you next receive an invoice, you pay into the new account, which is in fact the criminal’s bank account.

“Don’t give anybody your information. It is critical it is protected at all times,” Pillay said.