Fraud on the increase: CZI
THE Confederation of Zimbabwe Industries (CZI) reported a 4% increase in fraud cases during the first seven months of the year, in what is slowly becoming a major cost to business.
As the economy and economic opportunities continue to wane, with some stability in recent weeks owing to tighter fiscal and monetary policies, the police have been reporting a significant rise in crime.
The economic downturn is driven by forex distortions and money printing leading to Zimbabwe dollar that has created an inflationary environment, thereby eroding consumer and business income.
In its recent report titled “Crime Trends in Zimbabwe” covering the first seven months of the year, CZI said internet-related business transactions were driving the increase in fraud cases.
“Fraud cases increased by 4% to a total of 5 875 from January to July 2022 compared to 5 650 cases recorded during the same period last year. Out of these cases, a total of 3 045 accused persons were arrested and taken to court where 846 of them have been convicted,” CZI said.
“Due to the worldwide increase in the use of e-commerce, businesses are more susceptible to fraud cases. Businesses and individuals are losing large sums of money through transactions conducted via the internet. According to ZRP, most criminals are posing like potential customers intending to buy large quantities of products which they would propose to pay for using international transacting platforms.
“The business would receive text messages confirming that money has been transferred into their account when in actual fact, the message would be fake.”
Fraudsters are targeting electronic platforms due to billions of local currency dollars being transacted through those platforms on a daily basis.
During the first half of the year, ZW$6,2 trillion (US$16,71 billion) was transacted on electronic platforms, a 238% increase from the comparative 2021 period, according to the Reserve Bank of Zimbabwe (RBZ).
That means, monthly, an average of ZW$206,66 billion (US$557,09 million) and at least ZW$34,25 billion (US$92,32 million) on a daily basis was transacted electronically in the first six months of the year.
In August, the RBZ reported that transactions processed through the Zimbabwe Electronic Transfer Settlement System totaled ZW$2,33 trillion (US$6,28 billion), mobile and internet- ZW$1 trillion (US$2,69 billion), and ZW$183,76 billion (US$495,36 million) through card-based platforms.
In the last week of September, an average of ZW$88,36 billion (US$143,84 million) was being transacted daily electronically.
Commenting on the CZI report, Zimbabwe Information & Communication Technology (ZICT) chairman Jacob Mutisi said that electronic fraud cases report was actually more than what CZI reported.
This, he said, is because of current laws not breaking down electronic fraud into specific areas that are always evolving with the growth in technology.
“Those statistics are not up to scratch considering they do not cover the wide swathe of electronic crime. Even by word of mouth, to say, how many people have lost money?” Mutisi told Businessdigest.
“You would discover more and more people lost money but at the end of the day even if they go and report, the police officer would not understand how that crime was committed. The officer can then not arrest that individual who would have committed the crime because they do not have that information on hand.”
He said one way in which the electronic fraud occurs is through stealing social media information and using it to fleece people connected to the victim.
“I could write an email to the bank to say can you make a payment to so and so and as long as it is coming from my email, with my details and signature, they will pull it off. So, if one knows how the system works, the signature can be recreated using a similar email or even the same email can be generated then ask the bank to make a certain payment to an organisation or individual,” Mutisi revealed.
“It is happening, people are getting emails where they are being told your username and password is about to expire, please can you put in your username and password. Someone, ignorant, will put in their username and password then send, but once they have done that, they’re sending to that hacker who now has access to that email. That hacker now can in turn request for a certain payment. This is the main way it is happening on the internet.”
He said some of these criminals are known but because laws are not descriptive or do not include new forms of cybercrimes, criminals are hard to pin down.