Hey, big spenders in SA, the crooks are watching
IT MIGHT be the season for giving, but for fraudsters, it’s open season for taking. That’s the warning from TransUnion, the Banking Ombudsman and a leading bill payment aggregator, before the start of the festive season.
South Africa is particularly vulnerable to fraud, with PwC’s Global Economic Crime and Fraud Survey 2020 showing the country has the third most incidents of economic crime in the world, behind India and China. The report showed incidents of reported customer fraud stood at 47% last year, increasing from 42% reported in 2018.
TransUnion’s research has found a spike in Black Friday weekend e-commerce fraud in South Africa.
In its latest findings around online retail trends over the start of the holiday season, TransUnion found a 6.59% increase in suspected online retail fraud coming from the country compared to the same period last year. These findings are based on TransUnion’s analysis of online retail transactions for its e-commerce customers from November 26 to 30.
TransUnion’s Financial Hardship Study, conducted earlier last month, from November 1 to 3, found two in five (41%) of 1 100 consumers said that they had been targeted by digital fraud related to Covid-19, which is a 64% increase from its hardship survey conducted during the week of April 13. Know the score
In the latest report, TransUnion noted the percentage of households that check their credit score at least weekly (26%) has risen significantly since June (9%), while 56% of consumers say monitoring their credit is very or extremely important, up from 43% in June.
TransUnion’s data revealed the following trends for this holiday season, showing worrying increases since 2018:
7.40% from November 26 to 30; 18.55% so far this year. 6.94% from November 28 to December 2, last year; 5.32% in all of last year.
3.49% from November 22 to 26, 2018; 8.69% in all of 2018.
The days with the highest percent of suspected fraudulent transactions during the start of the 2020 holiday shopping season:
Sunday, November 29: 11.08% Cyber Monday, November 30: 9.42%
Saturday, November 28: 6.94% Thursday, November 26: 6.63% Black Friday, November 27: 4.43% Wise up
Nicho Bouma, the chief information officer at Pay@, a bill payment aggregator offering secure payment solutions, says since the festive season is synonymous with more transactions, the risk of fraud is heightened.
Not all things equal
Last week, the FSCA, Reserve Bank and the Payments Association of SA came under criticism for “fearmongering” after warning consumers against the use of instant EFTs as methods of payment.
Fintec digital payment provider Ozow said on average, about 20% of all e-commerce payments relied on the easy, fast and trusted means of payment and its payment solutions were so safe they had zero incidents of fraud since inception in 2014.
The SA Banking Risk Information Centre’s annual crime report for 2019 showed total gross fraud losses for SA issued cards increased by 20.5% from 2018 (R890.3 million) to last year (R1.07 billion), while credit card fraud increased by 16.2% from 2018 (R186.8m to last year (R217.2m).
Ozow chief executive of digital payments Thomas Pays said alternative payment systems like instant EFTs were becoming increasingly popular because of their ease of use, with no need to fill in card details for every transaction, and because they drove financial inclusion for those without debit or credit cards.
Eyes wide open
Bouma encourages customers to scrutinise their bills and to look out for subtle differences such as misspellings, blurred logos, colour variations, new banking details or variations on known email addresses (.com instead of .co.za, or .org).”
He said customers weren’t the only ones at a heightened risk of fraud, with around 60% of businesses also reporting fraud and/or economic crime within the past 24 months.
The Banking Ombudsman has also warned it’s “hunting season” for fraudsters. The office said in its 20 years of existence, experience had shown this was a time when criminals tried to take advantage of consumers.
Ombud’s tips for consumers
Protect yourself online by using trusted websites.
Safeguard your devices. Keep your cellphones and laptop safe and discourage multiple users on your device.
Secure your networks. Set strong passwords and ensure the sites you shop on are secure and are the legitimate websites. The icon representing a padlock on the browser must be locked.
Avoid public wi-fi connections and internet cafés for your online banking and purchasing. Rather use data to do emergency transactions.
Never ask a stranger for assistance at the ATM and be wary of strangers asking you for help.
Call your bank immediately in the case of an emergency. If you leave your cellphone at home, it could be too late to stop the withdrawal of the funds from your account.