WeeklySA_AdminOMBUDSMAN: Unfortunately banks are unable to fully protect unsuspecting consumers from falling prey to con artists’ ever-changing tactics to steal their hard-earned money.
Years ago, the most common scam was the phishing emails. This has been overtaken by vishing scams -the fraudulent phone calls.Few months ago, the Ombudsman for the Banking Service (OBS) received and recorded more than 640 new fraud complaints despite the daily warnings about these scams. Sadly, the banks are unable to fully protect consumers from falling prey to the tactics the fraudsters use to obtain confidential information such as banking details, card information and one-time-pins (OTPs)said Reana Steyn the Banking Ombudsman. She said banks are continuously evolving their products, services and systems to try and stay ahead of fraudsters since there is an increase in banking fraud. Steyn said this is achieved through the development and introduction of world-class security systems and technologies which will aim to protect consumers from becoming potential fraud victims. “Pensioners are tricked more than once,” Steyn said.
Banking Ombudsman Complaints Department
Xolani Bhengu* a 69-year-old pensioner received a call from a fraudster who claimed that they were from his bank. He was advised that the bank was in the process of stopping unlawful transactions that was made from his account. The fraudster requested the OTP that the bank sent to him and he gave it them, said Steyn. Subsequently, R10 000 was stolen from his account. He later complained to the OBS, and in this instance, despite being 100% at fault for the loss, the bank considered him a vulnerable consumer.
As a gesture of good will, the bank gave him a full refund and educated him about the various types of fraud, Steyn said.The bank further assisted him to download the bank’s app on his phone to improve the security measures in place and to prevent this type of incident, she said. “Months later, he received another call from a fraudster and was persuaded into processing a transaction of R26 500 from his banking app, instead, he reported the matter to the bank and his profile was blocked,” said Steyn. A month later he received a third call from a fraudster and again disclosed his banking details resulting in R5 500 being stolen from his account. While the bank declined to refund the R26 500, through the OBS’s investigation, it was discovered that the last transaction should not have been successful as his profile was supposed to be blocked and the bank agreed to refund the full amount of the last fraudulent transaction which is R5 500, Steyn said.
“Fraudsters are extremely sophisticated and convincing con-artists and it will be foolish to think that you will immediately see through the scam unless you are 100% clued up on these scams,” said Steyn. “Pensioners act on investment advice from their banker.” Steyn said
Yvonne Ndlovo* a 90-year-old pensioner, received a call from a fraudster who said they were calling from her bank’s fraud department. To ease her mind, the fraudster who also knew her e-mail address and these few seemingly unimportant facts provided her with his landline number and a reference number for the call.The fraudster convinced her into investing ina product called Luno and then persuaded Ndlovuto buy Bitcoins. Since she was convinced that she was talking to a bank agent, she provided her ID number and proof of residence- documents that are required to register an account at Luno. When the fraud was discovered, R50 000 was transferred from her bank account to a Luno account and converted into Bitcoin. Unfortunately, no recovery was possible, Steyn said.
Upon investigation it transpired that she had given the fraudsters remote access to her computer. As such, her online banking details were compromised when she logged onto her online banking profile.
“Social engineering fraud knows no boundaries,” Steyn said.
During lockdown last year, Mandla Zwide 45, was unable to go to the shops to pay a clothing account. As a result, his account fell into arrears. He later received a call from someone claiming to be a representative of the clothing store and offered to assist him with settling his arrears through an online payment. The caller knew his name, account number, and the fact that his account was in arrears. He was convinced and co-operated, said Steyn. The caller asked him to share his card number to a “facilitate an online payment” and Zwide obliged. The caller then requested him to confirm the three-digit CVV number, PIN for online transactions, which is found on the back of his bank card.
“At this point, Zwide became suspicious, hung up the call, and immediately contacted his bank’s fraud department to report the incident,” Steyn said. She said despite numerous warnings regarding this from the banks, the South African Banking Risk Information (SABRIC), through various media platforms and interviews by the OBS, they continue to receive complaints on a daily basis from consumers’ who were deceived into providing thec onfidential banking information to fraudsters.
“What is very clear from these cases is that anyone and everyone can be a target. However, the devastation caused by these scams to elderly citizens and pensioners, the most vulnerable members of society, is beyond heart-breaking,” said Steyn.
She said in many of these cases, it is not possible to recover money which has disappeared resulting in an already vulnerable group of people left without any recourse. Steyn said this often leads to destitution. While this fraud may be crippling to a person who is working, at least, they have an opportunity to rebuild their savings. OBS had a case where an elderly person’s entire pension was fraudulently stolen and there is no way, or time, for an 80-year-old pensioner to make up the loss, said Steyn.
“Covid 19 Pandemic, is the game changer and a major global disrupter,” she said. Steyn said statistics show that in many markets around the world, consumers are prioritizing their health and safety over their need to conduct physical transaction, be it purchasing groceries or transacting at their bank.
This trend has been replicated in the South African market to a large extent.
“With the exponential rise in online transactions as opposed to in-branch transactions, vishing scams have become one of the preferred methods for fraudsters to steal bank customer’s money. It must be pointed out that these individuals are very believable and are so convincing that consumers are lulled into a false sense of validity (that the request is legitimate) which then leads to the fraud taking place,” says Steyn.
She said unless the money is stolen at the bank or lost through the fault of an employee or a technological glitch at the bank, it is ultimately up to consumers to do all they can to protect themselves by staying informed about banking scams. The OBSurges consumers not to share personal details to anyone over the telephone or cellphone call.
“If in doubt, go to or call your nearest branch and speak to a consultant who will clarify the request for you if it is legitimate, she said.
