Increased connectivity places SA consumers at greater risk of financial scams

The price war among local broadband providers has meant increasing numbers of South Africans are enjoying wider access to the Internet.

September 17, 2013

The price war among local broadband providers, and the surge in volumes of mobile devices in South Africa, has meant increasing numbers of South Africans are enjoying wider access to the Internet. But it also places consumers at greater risk of becoming potential victims of financial scams.

This is according to Kevin Hurwitz, Chief Executive Officer at Wonga.com South Africa, who says cybercrime is becoming an increasing problem globally, and is becoming more prominent in South Africa as more people become connected. “As a result, it is imperative that people are aware of how to identify scams, in order to avoid being financially defrauded.”

The RSA Anti-Phishing service recorded a total of 1,942 new phishing attacks in South Africa for the first half of 2012, equating to an estimated financial loss of R71 million. In addition to this, the Symantec Intelligence Report for June 2012 identified South Africa as the second-most targeted country globally, with one in 170.9 emails identified as phishing attacks.

“It makes sense that South Africa has become a significant target for cybercriminals, as we have the largest Internet connectivity on the continent,” says Hurwitz.

Much has been said recently about phishing scams in particular, however there are many other scams that don’t involve phishing but are equally dangerous to consumers.

Hurwitz explains that various scams are used by criminals to illegally obtain personal information – such as bank account details, ID numbers, passwords and usernames. These are often sent electronically by individuals posing as legitimate entities, in order to conduct financial fraud. “Consumers are fooled into providing personal details, or depositing money into fraudulent accounts, based on the assumption that these communications are authentic.”

Hurwitz says that there are currently two primary channels used to conduct what is known as ‘advance fee scams’, namely email and SMS. “These communications are designed to look real and can easily trick consumers into financial losses.”

He says anyone receiving an unsolicited email or SMS which appears to come from a legitimate source, but requests personal information, should contact that organisation directly to verify that the communication is authentic, before taking any actions. Consumers who potentially fall victim to these scams are likely to ignore warnings about phishing, because they don’t generally transact online, so don’t believe the warnings relate to them.

According to Hurwitz, another popular type of scam currently doing the rounds involves people receiving an SMS (or email) claiming that they have won money, but in order to receive the funds they need to send their banking details, or deposit money into an account. “No official organisation would ask for personal details in this manner, or request money to be deposited in order to receive a prize, so everyone should immediately be suspicious of this type of communication.”

“With the number of innovative scams growling on a monthly basis, it is imperative that consumers are more vigilant about verifying any communication relating to financial matters before giving out personal information or making payments. After all, it is their identity and financial well-being they need to protect.”

Hurwitz provides the following advice to avoid falling victim to financial scams:

  • When an email or SMS requests personal details or payment,  contact the organisation directly to verify the authenticity of the communication
  • Never provide or verify personal details via SMS or unsecure websites (In order to identify a secure website, an image of a lock will appear on the browser status bar or the URL will read “https” as opposed to “http”)
  • Never deposit money into a bank account, especially a private bank account, unless the communication has been verified with a legitimate organisation
  • Never click on links, download files or open attachments from unknown sources
  • Never enter personal information on a pop-up screen – a legitimate organisation will never request details like this
  • Check bank statements regularly to ensure no unauthorised transactions have taken place