New year, new scams – what to look out for

After a good rest over December, South Africans typically tackle the new year with gusto and renewed vigour. It is also the time that scammers take advantage of people’s desperate need to access cash.

“While the start of the new year is exciting, it can also be an expensive time for most South Africans as they must make initial payments for school and university registration and textbooks and secure accommodation for children entering university,” Elmi Kemp, communications lead at the Southern African Fraud Prevention Service (SAFPS), says.

That is why the beginning of the year is a time when scammers and fraudsters are very active, she says. Kemp particularly warns consumers against loan scams, bursary and scholarship scams and shopping deals that are too good to be true.

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Loan scams to beware of

A loan scam is a loan offered under false pretences. Scammers try to hook their targets and reel them in by making big promises.

“Scammers will deceive you into paying them money in the hope of securing a bigger loan. They could ask for things like an administration fee, processing fee or insurance on the loan. Once you pay, the scammers will disappear. They also use the process to gain access to your personal data via phishing, which they will use to commit application fraud, open bank or store accounts and even take out loans in your name,” Kemp warns.

She says you should look out for:

• Guaranteed approval: They promise you large loans irrespective of your credit record or debt consolidation to help reduce your financial stress.
• Pre-payment of administrative costs: They ask you to pay a fee for administration or processing purposes and they want you to pay upfront using an untraceable payment method.
• Time constraints: They push you to decide quickly because “the offer will expire”.
• Special or exclusive offers: They will offer you a limited New Year deal or give you an offer from an unfamiliar brand.
• Impersonation: The person contacting you claims to be from a well-known organisation, but the email address and information do not link to that organisation.
• Interrogation: They ask for personal, sensitive, or irrelevant information upfront to phish as many details about you and your lifestyle as possible.

“Vigilance is key. Be alert to what people offer you. Remember, if it looks too good to be true, it probably is,” Kemp says.

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Bursary and scholarship scams

Education, especially when considering the private education route, has a significant cost associated with it. “These factors make bursaries and scholarships attractive options for many South Africans,” Nazia Karrim, head of product development at the SAFPS, says.

“The temptation of these options may cause potential victims to ignore the fact that the offer is a scam. As with a loan scam, scammers will typically ask for an advance fee, which they claim will cover the facilitation of the application.”

They either disappear once the money is paid over or ask for more money to release the documents which have been successfully processed. “Scammers have been known to string their victims along for a significant time until their victims have more than likely lost quite a bit of money.”

Your personal information can also be compromised by phishing that is also present in these scams.

Karim says you must look out for:

• Qualifying criteria: There are, for example, no minimum requirements, proof of your academic performance or that you are in fact in need of financial support.
• Pre-payment of administrative costs: They ask you to pay a fee to process the application.
• False notifications: If you get notified about a bursary or scholarship you did not apply for.
• Application support: They offer to complete your application for you, assist with late applications, or help you structure your applications for an increased likelihood of acceptance.
• Unknown sponsor/ bursar: You cannot find anything about this online or on any official website.

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Shopping deals that are too good to be true

Registration fees are not the only financial burden associated with the beginning of the year. Parents also have to buy laptops, textbooks and school uniforms.

“Shopping for brand new items has become expensive and is often out of reach for many consumers. Many South Africans turn to social media marketplaces to capitalise on used items offered at a reduced cost for textbooks and technology items, such as laptops and tablets.

“If textbooks are in good condition and technology is refurbished, they are functional at a reduced price. However, social media and online markets present opportunistic platforms for scammers,” Karrim warns.

This is true for social media and online marketplaces where scams are carried out with a great deal of social engineering. Social engineering is the practice where criminals exploit your trust to get access to your confidential information or money. It is about using your behaviour and what you share with the world against you.

A common scammers’ tactic is to create a fake profile and then befriend potential victims, taking great interest in their social lives. “People are more likely to trust a friend than a stranger. Social media could become a dangerous platform for consumers if it is not used with care, giving scammers access to information about you, your family, and your social habits and lifestyle.”

Karrim says consumers must look out for these warning signs:

• Unbelievable offers: Deals that are too good to be true, such as surprisingly low prices and free offers that pop up on your social media as ads. They are for a limited time only or while stocks last.
• Redirect to fake sites: They click through to sites you do not know or that resemble a legitimate website (spoof sites) and you must rather check the website links or URLs. You can verify the site and check if it is a spoof website using the SAFPS’ Yima website scanner via the Yima website. The scanner will let you know if this is a legitimate site and safe to use.
• Phish payment details: You have to pay via untrusted/untraceable methods or the scammers simulate a trusted payment service provider’s process. Your card details and card verification value (CVV) details are then phished and sold, or unauthorised transactions may be processed from your account immediately.
• Inaccuracies: Spelling and grammatical errors in ads and website links, as well as contradictions in contact or location details (invoice/website/advert) or excuses that international call centres are used for customer support.

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How to protect yourself against scams

Karrim says the SAFPS launched Yima in response to the growing need to provide consumers with tools to stand up to scammers. “The Yima website hosts a scam prevention toolbox for South Africans to report scams and scan any website for vulnerabilities related to scams. Knowledge is power and consumers can find helpful tips and articles to expand their knowledge on how to identify a scam.”

Yima’s main element is the ability to report a scam incident or any suspicious activity to the SAFPS using the Yima website. Suspicious activity can be reported, including a fake or suspect-looking online shopping website or portal and instances where the user has received phoney banking information.

Intelligence gathered from these reports is collated and shared with law enforcement for investigations. Users can also access a scam hotline (083 123 7226) to report a fraud incident directly to their banks, retailers, insurance companies and the South African Police Service via a single number.

 “Yima offers consumers access to the SAFPS’ products and services at no cost. Protective Registration and Fraud Victim Registration are two important products that protect victims of impersonation scams.

“Combined with Yima, the SAFPS created a bouquet of products that takes the fight to fraudsters and scammers. As the custodians of fraud prevention in Southern Africa, we are making a difference to consumers in their fight against scams and fraud,” Karrim says.

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Protective registration can help

Protective registration is one of the SAFPS’ most essential services and is the core of its offering. It is a free service that protects individuals against future fraud. When consumers apply for this service, the SAFPS alerts its members to take additional care when handling that individual’s details.

Protective registration provides an added layer of protection and peace of mind regardless of whether the applicant’s identity has been compromised.

Visit the SAFPS website here and follow the prompts to apply for protective registration. You can also visit the Yima website here to explore useful articles about scams and consumer products.