Consumer Watch: Hey, big spenders in SA, the crooks are watching

It might be the season for giving, but for fraudsters, it’s open season for taking. That’s the warning from TransUnion, the Banking Ombudsman and a leading bill payment aggregator, before the start of the festive season.

South Africa is particularly vulnerable to fraud, with PwC’s Global Economic Crime and Fraud Survey 2020 showing the country has the third most incidents of economic crime in the world, behind India and China. The report showed incidents of reported customer fraud stood at 47% last year, increasing from 42% reported in 2018.

TransUnion’s research has found a spike in Black Friday weekend e-commerce fraud in South Africa.

In its latest findings around online retail trends over the start of the holiday season, TransUnion found a 6.59% increase in suspected online retail fraud coming from the country compared to the same period last year. These findings are based on TransUnion’s analysis of online retail transactions for its e-commerce customers from November 26 to 30.

TransUnion’s Financial Hardship Study, conducted earlier last month, from November 1 to 3, found two in five (41%) of 1 100 consumers said that they had been targeted by digital fraud related to Covid-19, which is a 64% increase from its hardship survey conducted during the week of April 13.

Know the score

In the latest report, TransUnion noted the percentage of households that check their credit score at least weekly (26%) has risen significantly since June (9%), while 56% of consumers say monitoring their credit is very or extremely important, up from 43% in June.

TransUnion’s data revealed the following trends for this holiday season, showing worrying increases since 2018:

7.40% from November 26 to 30; 18.55% so far this year.

6.94% from November 28 to December 2, last year; 5.32% in all of last year.

3.49% from November 22 to 26, 2018; 8.69% in all of 2018.

The days with the highest percent of suspected fraudulent transactions during the start of the 2020 holiday shopping season: Sunday, November 29: 11.08% Cyber Monday, November 30: 9.42%

Saturday, November 28: 6.94% Thursday, November 26: 6.63% Black Friday, November 27: 4.43% Wise up

Nicho Bouma, the chief information officer at Pay@, a bill payment aggregator offering secure payment solutions, says since the festive season is synonymous with more transactions, the risk of fraud is heightened.

“I believe that there will be an uptick in fraud, unless South African consumers and businesses are more security-conscious.”

With more people using online payment systems, consumers are urged to use reputable digital channels when making payments.

Not all things equal

Last week, the FSCA, Reserve Bank and the Payments Association of SA came under criticism for “fearmongering” after warning consumers against the use of instant EFTs as methods of payment.

Fintec digital payment provider Ozow said on average, about 20% of all e-commerce payments relied on the easy, fast and trusted means of payment and its payment solutions were so safe they had zero incidents of fraud since inception in 2014.

The SA Banking Risk Information Centre’s annual crime report for 2019 showed total gross fraud losses for SA issued cards increased by 20.5% from 2018 (R890.3 million) to last year (R1.07 billion), while credit card fraud increased by 16.2% from 2018 (R186.8m to last year (R217.2m).

Ozow chief executive of digital payments Thomas Pays said alternative payment systems like instant EFTs were becoming increasingly popular because of their ease of use, with no need to fill in card details for every transaction, and because they drove financial inclusion for those without debit or credit cards.

Eyes wide open

Bouma encourages customers to scrutinise their bills and to look out for subtle differences such as misspellings, blurred logos, colour variations, new banking details or variations on known email addresses (.com instead of .co.za, or .org).

“Often, people fall for scams where the service provider has supposedly changed their bank account number. If you are in doubt, call them to confirm the details on your account.”

He said customers weren’t the only ones at a heightened risk of fraud, with around 60% of businesses also reporting fraud and/or economic crime within the past 24 months.

The Banking Ombudsman has also warned it’s “hunting season” for fraudsters.

The office said in its 20 years of existence, experience had shown this was a time when criminals tried to take advantage of consumers.

“October was Cyber Security Awareness Month and we have just completed International Fraud Awareness week (which ran from November 15-21). These two events are important as there are increased transactions taking place over the internet, and the festive season is one which traditionally sees a lot more transactions (online and conventional transactions) than any other time of the year,” said Banking Ombud Reana Steyn.

She said that while consumers welcomed the festive season bargains, not all of them were genuine. Cyber criminals were becoming “very inventive” in the way they committed their crimes.

“During this period, fraud is likely to occur when transacting online or with bank cards at the ATM and other point of sale devices. Consumers will also receive calls from criminals pretending to be representatives from their bank. Even though the caller may know your identity number, name, and card number, consumers are urged to never disclose any confidential information such as the CVV number on the back of their cards or the one-time pin sent to their phones by the bank. It is very important to remember that the bank will never ask you for your access code, password and PIN over the phone or via email links,” Steyn said.

Meanwhile, the SA Fraud Prevention Service (SAFPS) said that in light of the Experian data breach in August and last week’s announcement of Absa’s own data breach by an employee, the public needed to become more savvy about their digital footprint and take steps to protect themselves from becoming victims.

Manie van Schalkwyk, the chief executive of service, said consumers must know they could turn to the SAFPS for free protection against fraud. He urged consumers to visit www. safps.org.za and register to protect their identity against identity fraud.

The service’s Protective Registration is free, protecting individuals against future fraud. Consumers apply for this service and the SAFPS alerts its members to take additional care when dealing with that individual’s details.

Ombud’s tips for consumers

Protect yourself online by using trusted websites.

Safeguard your devices. Keep your cellphones and laptop safe and discourage multiple users on your device.

Secure your networks. Set strong passwords and ensure the sites you shop on are secure and are the legitimate websites. The icon representing a padlock on the browser must be locked.

Avoid public wi-fi connections and internet cafés for your online banking and purchasing. Rather use data to do emergency transactions.

Never ask a stranger for assistance at the ATM and be wary of strangers asking you for help.

Call your bank immediately in the case of an emergency. If you leave your cellphone at home, it could be too late to stop the withdrawal of the funds from your account.

* Georgina Crouth is a consumer watchdog with serious bite. Write to her at consumer@inl.co.za, tweet her @georginacrouth and follow her on Facebook.