WeeklySA_AdminRACKETEERING: Banking fraud complaints make up most incidents, followed by micro finance and clothing retail sectors…
By WSAM Reporters
Identity theft fraud risk continued to be a major concern for South African consumers, with scores unwittingly falling victim to the mushrooming online and phone call scams daily.
This is according to the latest study conducted by South Africa’s largest credit bureau, TransUnion, which found that as many 60 percent of the consumers interviewed by their researchers had been targeted by online, email, phone call or text messaging scammers in the last three months.
The latest study’s findings correlate with the SA Fraud Prevention Services (SAFPS) warnings in July this year, that impersonation fraud – also known as identity theft – had surged by 337 percent over the past year, reaching its highest level as criminals increasingly open or take over accounts using stolen identities.
According to the TransUnion study, a total of 34 percent of those interviewed reported to have been targeted by phishing schemes (fraudulent emails) during the same period – representing a 28-percent increase compared to the period between April and June this year.
Similarly, the study also found that there had been a 12-percentage point rise to 32 percent in “vishing scams” (fraudulent phone calls that try to trick people into revealing data).
The survey was conducted among 952 South Africans aged 18 and older by TransUnion, in partnership with Dynata, between July 16 and 31 this year.“Identity (theft) risks continue to be a concern for South African consumers,” says TransUnion in its latest “Consumer Pulse Study for Q3 2024”.
Identity theft was one of the fastest growing crimes in the world: experts believe that someone’s identity is stolen somewhere in the world every two seconds, according to TransUnion.
“Yet most people believe it cannot happen to them until it is too late and their creditworthiness has been destroyed. Because identity theft is a ‘silent’ crime, it can go undetected for months, even years while victims have enormous debts run up in their name,” says TransUnion.
Many cases of identity theft came to light only after the victim started receiving accounts and letters of demand for debts they knew nothing about; or when their own application for credit was refused because their credit record was in tatters.
An exposé on MNET’s Carte Blanche earlier this year showed that no one was immune – and sophisticated ID theft syndicates were right in everyone’s own backyard. The TV programme uncovered a syndicate operating in Soshanguve, a township near Pretoria, which sells fake Identity documents and identity profiles for just R3 000 – or more, depending on the credit profile of the identity theft victim.
Meanwhile, non-profit entity SAFPS was established to protect hundreds of consumers from the prevalent identity fraud scams. It aims to improve vigilance with regard to fraud, financial crime, and identity theft by educating businesses and consumers and assisting them in protecting themselves.
SAFPS says the fraud landscape has steadily increased over the past five years, making this one of the top risks South Africans face daily. The 2024 fraud statistics point out a 32 percent increase in the number of fraud incidents reported to the SAFPS in 2023, with a 62 percent increase in fraud listings.
“Once again, certain sectors are more open for fraudsters than others. Banking fraud made up 45% of the fraud incidents reported last year. This was followed by the microfinance sector (19%) and the clothing retail sector (14%). This indicates that financial institutions and the retail sector are under significant pressure regarding fraud,” SAFPS chief executive Manie Van Schalkwyk told Moonstone Information Refinery recently. As with previous years, Gauteng, KwaZulu-Natal, and the Western Cape were the main centres that experienced fraudulent activity. However, there has been a significant increase in the Free State.
“While the Free State is only a small contributor to the country’s fraud statistics, the province has experienced a 56% increase in fraudulent activity. Our investigations have picked up that this is being driven by money muling, which is very prevalent in the province,” says Van Schalkwyk.
One of the most common forms of money muling occurs when a victim is approached by someone claiming that they need to receive money from a family member in another country and they need a bank account to perform this transaction, according to SAFPS.
“Many people want to help and willingly let these fraudsters use their bank accounts. Although this may seem an innocent crime, research from Cifas in the United Kingdom points out that money-muling funds activities such as drug and human trafficking and terrorist activities,” says Van Schalkwyk, adding that the repercussions of being a money mule were significant.
“The guilty party will be listed with the SAFPS, and the result is that the individual could struggle to get access to finance for 10 years. It is one of the biggest issues that the SAFPS is currently facing, and it is important for the public to know about the seriousness of this crime,” he says.
According to the 2024 fraud statistics, victims of impersonation increased by 54 percent in the past year.
Guard your personal information
Personal information such as your identity number, bank account details, contact numbers, address details, retail account details, are the primary catalyst for every fraud scam.
Insurance company Santam shares the following precautions consumers can take to protect their personal information:
· Always verify and authenticate any request for information, no matter how genuine it seems at first glance. This may mean that you must call the insurance company or your broker directly to verify the request. Remember the psychological manipulation effect – fraudsters make you feel important and respected to gain your trust.
· Never share identifiable information, policy numbers, and claim numbers with strangers.
· Take extra caution when storing or disposing of insurance documents.
· Be cautious when clicking on links
