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FI­NAN­CIAL SCAMS: SOUTH AFRICA A HOT­BED

The Citizen (KZN) - - Business - Her­man Lom­bard

So­cial me­dia-based scams are preva­lent and ef­fec­tive in dup­ing vic­tims.

Con­sumer fraud is the sec­ond high­est-rank­ing cat­e­gory of re­ported eco­nomic crime in SA and life insurance fraud has seen a re­cent spike. Insurance com­pa­nies are be­ing in­creas­ingly thor­ough and vig­i­lant.

Mul­ti­ple re­trench­ment ap­pli­ca­tions from the same em­ployer; nat­u­ral death sus­pi­ciously soon af­ter a life pol­icy com­mences and op­por­tunis­tic life poli­cies taken against the im­mi­nent death of ca­sual church or work ac­quain­tances are some of the most com­mon insurance scams.

A com­mon scam is linked to funeral cover where the vic­tim be­lieves they’ve bought funeral cover. Th­ese “poli­cies” are of­ten sold face to face and pre­mi­ums col­lected in cash. It’s of­ten only when a loved one dies that the pol­icy holder dis­cov­ers they don’t have the cover they thought they did.

When buy­ing insurance, know which insurance com­pany will be pay­ing out the claims and en­sure it’s rep­utable. See the pol­icy document be­fore pay­ing money.

Dig­i­tal bank­ing fraud

The most com­mon dig­i­tal bank­ing frauds are unau­tho­rised SIM swaps while you’re on your bank­ing app, or voice phish­ing (vish­ing), where a fraud­ster per­suades you over the phone to di­vulge con­fi­den­tial in­for­ma­tion re­lated to your bank ac­count, like your one-time pass­word.

There ap­pears to be a cor­re­la­tion be­tween so­cial iso­la­tion and be­com­ing a vic­tim of fraud. Fi­nan­cial il­lit­er­acy and des­per­a­tion play a sig­nif­i­cant role.

Ex­perts warn that so­cial me­dia-based scams are also highly preva­lent and ef­fec­tive in dup­ing vic­tims. En­sure the au­then­tic­ity of ev­ery com­mu­ni­ca­tion you re­ceive.

Some of SA’s most com­mon types of on­line scams are:

Fake Face­book give­away: Scam­mers lure vic­tims with prom­ises of out­ra­geously gen­er­ous prizes only to phish the per­sonal and fi­nan­cial de­tails of en­gagers. Th­ese scams usu­ally at­tempt to mimic a pop­u­lar brand or celebrity page. En­sure you deal with a Face­book-ver­i­fied com­pany page. Card not present fraud: This in­volves il­le­git­i­mate on­line pur­chases with­out hav­ing a phys­i­cal card or the card holder’s per­mis­sion. Card de­tails are usu­ally ac­quired via data breaches, mal­ware or phish­ing. Be cau­tious with your credit cards and only shop at rep­utable on­line stores. Watch your state­ments, and never give out credit card de­tails in emails.

Ad­vance-fee scam: This in­volves be­ing of­fered a vast sum of money for a seem­ingly le­git­i­mate rea­son on con­di­tion that a small ad­min­is­tra­tive fee is de­posited and/or bank de­tails fur­nished. Of­ten scam­mers pose as fi­nan­cial ser­vice providers of­fer­ing per­sonal loans. Al­ways check whether an al­leged fi­nan­cial ser­vices provider has a gen­uine of­fi­cial web­site. Spell­ing and gram­mat­i­cal er­rors are a ma­jor red flag. A real reg­is­tered credit provider would never ask for money up­front to con­firm a loan.

What­sApp scams: Th­ese vi­rally spread links that ap­pear to be from ei­ther an above-board busi­ness or What­sApp it­self. Click­ing on the links al­lows fraud­sters to in­fil­trate your de­vice with mal­ware. Be very wary of What­sApp mes­sages which of­fer prizes or dis­counts and must be spread among your con­tacts.

If you’ve been scammed re­port it and talk about it to your friends and fam­ily so they don’t fall vic­tim.

Her­man Lom­bard is founder and ex­ec­u­tive di­rec­tor of African Unity.

Spell­ing and gram­mat­i­cal er­rors are a red flag

Pic­ture: Shuttersto­ck

ES­CA­LAT­ING. Dig­i­tal bank­ing fraud has in­creased dra­mat­i­cally and in 2018 amounted to R262 mil­lion in gross losses in SA.

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