Banking scams are increasing – here’s how to protect yourself

Banking scams are still increasing despite extra measures to protect banking clients, but there are steps consumers can take to add to the layer of protection. With the end of the year and the festive season fast approaching, scammers are licking their lips in anticipation of taking advantage of increased shopping activity.

Many South Africans recently contacted a popular Johannesburg radio station reporting increased attempts at banking fraud, with scammers sometimes becoming increasingly aggressive and convincing.

“This is not uncommon. Scammers generally tend to be more active during periods of increased consumer activity. It is essential to know how to spot a banking scam and what measures you have available to prevent you becoming a victim,” Roy Retief, head of operations at the Southern African Fraud Prevention Service (SAFPS), says.

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Watch out for impersonation fraud

When it comes to banking scams, scammers constantly devise new methods to steal from their victims, but most common scams follow a set formula.

Retief warns that impersonation fraud is rife when it comes to banking scams. “Scammers will often contact potential victims posing as bank representatives. Armed with a lot of information about their potential victims, scammers will ask them to confirm banking details or other sensitive information such as ID numbers.

“In line with the gravitation towards online banking, many scammers will phone their potential victims, posing as a bank representative and tell them they need to perform an important action on their online banking profile.”

Scammers are often tech-savvy and can remotely access a victim’s compromised mobile device, triggering a technical issue to create a sense of urgency or panic, Retief says. The victim then feels they need to follow the prompts from the scammer to secure their device. Armed with this, scammers can cause significant damage.”

A new modus operandi involves scammers calling potential victims and asking them to move money into a safer or higher-interest-bearing account. “Victims will unknowingly move their money from their accounts into the scammer’s account,” Retief says.

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Common complaint at the ombudsman’s office

Nerosha Maseti, Lead Ombudsman for the banking division of the National Financial Ombud Scheme (NFO), points out that complaints about banking scams have been and continue to be the biggest contributors to formal complaints opened at the NFO’s banking division.

“In 2023, 3 380 (43.47%) of the 8 521 formal cases opened at the Ombudsman for Banking Services for the year were categorised as fraud. In the context of a changing global banking landscape, where branch networks are shrinking, volumes of digital payments are increasing and payments are processed in seconds, fraudsters are creatively finding new ways to steal from banks and their customers.”

Banks all over the world and in South Africa are seeing an increasing trend in scams. “Fraudsters are manipulating and coercing customers into making payments to them, bypassing bank controls,” Maseti warns.

She points out that, when investigating these complaints, the ombudsman’s investigation will typically involve ascertaining whether there was wrongdoing or negligence on the part of the bank that caused the customer’s losses or contributed to them.

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Ombudsman checks if bank was negligent first

“If, after our investigation, we find that the bank could have prevented or mitigated the customer’s losses but failed to do so, we have the power to recommend to the bank involved to refund the portion of the customer’s losses that could have been prevented but for the bank’s negligence.”

However, Maseti says it is important to note that the ombudsman’s starting point when dealing with these complaints is that the bank customer is liable for all voluntary transactions or those that take place using that customer’s confidential banking access details.

“Liability only shifts to the bank once fraud or compromise of the confidential access details is reported to the bank. Only then will the bank be expected to take immediate steps to prevent the customer’s losses. We can only make a recommendation where we find that there has been unfair treatment, negligence, non-compliance or maladministration on the part of a bank.”

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How to prevent being scammed

Consumers must remain vigilant and aware that they are ultimately responsible for any transactions that take place on their accounts, no matter how convincing the scammer is.

 You can protect yourself from being scammed by:

• Ignoring any SMS or email notification that asks you to follow a link and provide your username and password
• not storing any banking credentials on your smartphone
• not letting your browser save your banking passwords
• ensuring that your banking credentials are unique and not used to log into any other websites, email accounts or apps
• ensuring all your details are removed, your banking app uninstalled and delinked from your banking profile and the phone reset to factory settings when selling your phone,
• never leaving your smartphone unattended when you are logged in
• using two-factor authentication whenever possible to increase the security of your login
• not jailbreaking your iPhone, using pirated software, or compromising the security of the software on your device, as this could easily lead to attackers spying on you without your knowledge
• installing a reputable anti-malware solution on your device to detect and block signs of malicious activity. Remember to keep the software updated to ensure maximum effectiveness
• not accessing your banking app in busy public places or while outside venues waiting for e-haling services, where it is easy for a criminal to snatch your mobile device while your banking app is unlocked and
• not accessing your banking app or performing sensitive financial transactions while connected to unsecured public wi-fi networks.

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Also use tool called Yima

You can also add another layer of protection. Retief points out that the SAFPS launched Yima in response to the growing need for a proactive approach to fraud prevention.

“Yima allows you to report scams and scan any website for vulnerabilities related to scams. You can also educate yourself on how to identify a scam. These tools will enable you to surf the internet, access key products, such as online banking and money transfers more confidently and make you aware and informed. These are just some exciting elements South Africans can access through the site,” he says.

The website’s main element is the ability to report a scam incident or any suspicious activity to the SAFPS. This suspicious activity includes a fake or suspect-looking online shopping website or portal as well as instances where the user receives phoney banking information. Users can also access a scam hotline to report fraud incidents to their banks and the police.

Yima users also have access to the consumer products and services offered by the SAFPS.

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Protective Registration also important

Protective Registration is one of the SAFPS’ most essential services. It is a service that protects individuals against future fraud at no cost to the consumer. After you apply for this service, the SAFPS alerts its members to take additional care when handling your details. It provides an added layer of protection and peace of mind regardless of whether the applicant’s identity has been compromised.

If you want to become proactive in the fight against fraud, the SAFPS is there to help you, Retief says.

Visit the SAFPS website at www.safps.org.za. Click on the ‘Apply for Protective Registration’ tab and protect yourself against identity theft. For best results, use your smartphone to visit the website. Once you uploaded key pieces of information, you will receive a confirmation letter on e-mail, adding another layer of protection against potential ID fraud.