Typical scams to avoid this festive season

It’s that time of year when things start winding down and people are relaxing – and when scammers are getting busy …

DirectAxis, a direct-to-consumer insurance brokerage and business that has been in operation for more than two decades gave five tips for avoiding common scams:

1. Never click on a link in an email or SMS
One of the ways scammers try to obtain your personal information is to send an email or an SMS that seems to come from a bank or financial services company (or even SARS), alerting you to a payment, or refund or asking you to confirm your details.

When you click on the link it takes you to a site that looks genuine but is fraudulent. As soon as you enter your account details and PIN, the fraudsters can access your account. No responsible financial institution should ever send you a link to a bank account log-on page in an email or SMS.

2. Never pay an upfront fee to secure a loan
Another way criminals try to get their hands on your money is by pretending to be a legitimate financial services company.

The way this scam typically works is that you receive an e-mail informing you that you’ve qualified for a low-interest loan. It says that to secure the loan, you need to pay an upfront fee for administrative, legal or other costs. The offer is often for a limited time, to try and pressure you into making the payment. Of course, if you pay, the thieves take your money and you never get the money. Just because an email has a company logo, registration number and address on it, doesn’t mean it’s genuine. If you’ve made an offer with an unbelievably low interest rate, don’t believe it.

3. Guard your personal details
Not all scammers are out to get your money. Some just want to get enough of your personal information, such as your ID number, address, and date of birth to open a fraudulent store or loan account. These scams work because the request for information usually seems reasonable, such as a financial institution, retailer or online shop asking you to confirm some information.

Criminals are also increasingly targeting loyalty programmes, such as those that airlines, banks and many retailers offer. It is thought they’re doing this because people don’t see reward points as real money and are consequently less security-conscious.

4. If it sounds too good to be true, it’s a con
The best-known scams are used over and over again, because they still catch plenty of people, no matter how often they are warned.
The most common of these is the lottery scam where you’re told you’ve won a lottery and have to provide information such as your banking details to claim the prize. You might also be asked to pay a fee for administration costs.

Variations include the inheritance scam, which works along the same lines, or the hard-luck story, where a wealthy businessman or politician claims to need your help to transfer a large sum of money. The scammers assume that greed will overcome reason and that the anticipation of being rich will make people push aside any doubts about whether the request is authentic.

5. Don’t be tempted by unfamiliar websites
Criminals know that with Christmas coming, people will be looking for presents at great prices, so they set up fraudulent websites to try to con people out of their money.

Although this scam is more common overseas than in South Africa, you can be sure it’s going to happen more often here. If you are shopping online, applying for a loan, or doing any other transaction that involves providing your personal or banking details, stick with known brands. Always type the brand name into your browser rather than following a link in an email.

One final tip is that if you think someone’s tried to scam you, report it, even if you have no intention of responding. Most reputable financial institutions and retailers have fraud departments and will act to shut down websites and bank accounts used to try and defraud their customers.

Finally – bear in mind that although these are the most typical scams, criminals are constantly trying to find new ways to separate you from your hard-earned cash. You need to be vigilant constantly and if you’re not confident an offer or request is genuine, always check first.

• Source: DirectAxis Archives