The risk of fraud is not to be taken lightly, and as South Africans face unprecedented challenges, awareness and proactive measures are crucial.
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Fraud which is defined as deception for financial gain, is a rapidly rising threat that impacts thousands of South Africans every year.
The Southern African Fraud Prevention Service (SAFPS) reported that there was a 356% growth in impersonation fraud between April 2022 and April 2023 while the South African Banking Risk Information Centre (SABRIC) has noted a 36% rise in reported online banking fraud incidents in 2024.
SABRIC recently reported that financial crimes led to losses nearing R3.3 billion in 2023.
Digital banking fraud, in particular, soared with incidents rising by 45% and the related financial losses rising by 47%.
Fraud on banking apps now makes up 60% of all digital banking crimes, with an 89% year-on-year increase which illustrates the growing threat to the financial security of consumers.
If consumers fail to take action, then he financial repercussions are likely to grow. Studies show that for every rand lost to fraud, an organisation incurs an additional cost of R3.64 due to indirect expenses like labour, investigation, and external fees.
These figures reveal the wider financial impact fraud can have on both individuals and the economy which reinforces the need to take action now.
It is vital to equip yourself with information about common fraud tactics, its associated risks as well as security practices to protect your financial future.
Fraudsters are regularly evolving their techniques, therefore knowing the most common types of scams can make all the difference.
These are some tactics to watch out for:
Impersonation fraud
Scammers may pose as legitimate Financial Service Providers (FSPs) via fake websites, emails, and phone calls to bait you into sharing sensitive information or transferring funds.
Therefore should verify the identity of any FSP you interact with.
You can use a website scams vulnerability scanner to scrutinise the legitimacy of websites and check emails for any errors in spelling for email addresses, company names as well as the content of the email.
High-pressure tactics
Fraudsters create urgency to push you to acting quickly before you have time to think. This method is commonly used in "you’ve won a prize" schemes or urgent "security alerts" from supposed FSPs or banks.
Phishing and smishing
Through the usage emails or SMS messages that appear to be from legitimate institutions, fraudsters prompt you to click on links or enter personal information. These links may look legitimate but can they can put you at risk.
Taking proactive steps to protect yourself is equally important as knowing the tactics that frausters use. Take a look at practices that you can use to protect yourself, both online and offline:
Verify Financial Service Providers (FSPs)
You should always verify any FSP that you are planning to engage with.
Use the FSCA website to confirm the registration of FSPs. Never trust contact details in unsolicited communications and take the time to verify independently.
Use strong, unique passwords
A strong password is one of the simplest yet most effective ways to protect your online accounts. Use a mix of letters, numbers, and symbols, and avoid easily guessed information like your birthdate. Update passwords regularly to keep accounts secure.
PIN security
When choosing a PIN, it's often better to go with 5-8 digits rather than just 4 digits.
A 4-digit PINs may seem convenient, but they are more vulnerable to attacks due to the limited number of possible combinations while a longer PIN significantly increases the level of security, making it harder for fraudsters to crack.
Ensure that the PIN that you choose is difficult to guess, and avoid common patterns like "1234" or your birth year.
Guard against high-pressure tactics
If someone puts pressure on you to making a quick financial decision, then take a step back.
Legitimate service providers won’t push for instant responses so be cautious if you feel rushed.
Exercise caution with unsolicited communication
Beware of any unsolicited emails, texts, or calls that request personal or financial details as fraudsters often steal official logos or use professional language to appear credible.
Avoid clicking on links unless you are absolutely certain they are safe. You can also call your FSP or bank directly to confirm.
Stay informed about the latest scams
Keep updated on the latest fraud tactics using trusted sources like the FSCA and the SAFPS as awareness can help you spot and avoid potential threats.
If you or a loved one falls victim to fraud, this is what you need to do:
Report to your bank
Contact the fraud department of your bank immediately. Various banks provide fraud hotlines and even WhatsApp reporting, which can help prevent further damage to your accounts.
File a report with law enforcement
Report the incident to the South African Police Service (SAPS) by visiting your nearest station or calling 0860 101 117. This creates a formal record and will support any investigation.
Notify financial regulators
Contact the FSCA and the Financial Advisory and Intermediary Services Ombudsman if the fraud involves financial services. This can help you secure recourse as well as protecting other consumers.
Consult SAFPS
By reporting the matter to SAFPS, you contribute to a fraud-tracking database which can assist the authorities to identify patterns and better protect the public.
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