Fraud continues to pose the risk of serious financial losses for banking customers.
According to Reana Steyn, the Ombudsman for Banking Services (OBS), new scams are increasing the number of victims.
Although the basic modus operandi of these scams is not new, there is a constant change in the techniques that fraudsters apply.
One of the recent matters investigated by the OBS was that of a post office scam.
Mr M advised that he received emails supposedly from the South African Post Office informing him that unclaimed packages were waiting for him at the head post office.
He advised the representative in the email that he did, in fact, have a package at the post office that had not yet been collected.
He then received an SMS from the post office advising him to pay a fee of R42,50 for the package to be released.
Mr M followed the instructions on the link he received, and the link opened to a payment option on an official post office payment page.
He inserted his card details and received an “Approve It” message on his cellphone. He approved the transaction.
Immediately thereafter, he received another “Approve It” message from his bank. When he noticed the word “Singapore”, he realised that he was being defrauded.
He immediately reported the fraud to his bank and instructed the bank not to release the pending transaction of R16 061,80.
However, since the transaction had been authorised with the use of the card details and the “Approve It” message, the bank had already released the transaction and refused any liability for the loss that was suffered.
The OBS determined that Mr M made the payment himself and approved the transaction through his banking app.
The OBS further found that although Mr M thought he was making a payment of R42,50, the message he received from the bank for the authentication of the payment read: “You are about to make an online purchase of CHF 1 000.00 at BIGO Live”.
Since it was clear from the message that the payment was not to the post office and that the purchase amount was not R42,50, the OBS found against Mr M and concluded that he was unfortunately a victim of a phishing scam where he willingly compromised his confidential banking details.
Fraud claims and losses
According to Steyn, fraud claims and losses for OBS complaints exceeded R295 million in 2021.
Steyn warned that banking fraud has become a very lucrative business for online scammers.
The banking fraud matters investigated by her office in 2021 alone exceeded R295 million.
She confirmed that in most of these matters, the amounts claimed were not recovered as they had already been withdrawn by the fraudsters.
Steyn said these scams are avoidable and called on bank customers to be extra vigilant in 2022 to ensure that they do not suffer financial losses over a scam that could have been avoided. She urged people never to provide confidential banking details to a stranger over the phone or enter these details on a link received via email or SMS. She also warned customers to never accept assistance from a stranger at an ATM.
According to Steyn, the power to prevent scams lies mostly with consumers. The responsibility is on them to always remain vigilant and suspicious, especially when requested to provide their confidential banking details.
Fraud detection and insurance
Although banks have created various fraud detection systems to monitor and detect unusual transactions and prevent it where possible, these measures do not guarantee that all fraudulent transactions can or will be detected.
Steyn advised that such losses are not for the banks to absorb through their insurance.
According to Steyn, some customers believe that banks are insured for the losses suffered by clients through banking scams.
“This is incorrect. The only time the bank will be held liable by the OBS is when the losses suffered by the customer were because of the bank’s negligence or wrongdoing.”
Preventing fraud
According to Steyn, vigilance can prevent customers from falling prey to schemes.
- Banks will never ask you to confirm your confidential banking information over the phone. If you receive such a call, end it and contact your bank’s fraud hotline immediately.
- If you receive a one-time PIN (OTP) on your phone without having made a transaction, it is likely that a fraudster has used your personal information. Do not provide the OTP to anybody. Do not click on links or icons in unsolicited emails or SMSs.
- Do not make payments into an unknown account without first verifying their authenticity.
- When doing online shopping, only make payments on secure websites.
- While transacting at an ATM, always keep an eye on the card slot to ensure that your card is not removed, skimmed and replaced without your knowledge. Report lost and stolen cards immediately.
- Be alert to your surroundings. Do not use the ATM if there are loiterers or suspicious people in the vicinity.
- Key in your PIN in such a way that no one can see it, and do not let anyone stand too close to you.
