3 scams targeting consumers in South Africa right now

South Africans are facing an increasing risk of becoming a victim of fraud, new data from the Southern African Fraud Prevention Service (SAFPS) shows.

The statistics compare the first five months of 2022 to the same period in 2021.

“This is particularly concerning given the economic climate that we are currently facing,” said Manie van Schalkwyk, CEO of the SAFPS. “Consumers are facing a significant cycle of high inflation and are looking for ways to make ends meet. This makes them increasingly vulnerable to scams and schemes which are being carried out by highly motivated, highly skilled fraud syndicates.

Money mule

The SAFPS pointed to an increase in the money mule scam. This is when a person approaches someone else and asks them if they can use their account to send money to a relative in another country.

“While this should immediately be a red flag, you will be surprised at how many people willingly comply in the hope that they can be of assistance,” said Van Schalkwyk. This then opens the door for fraudsters to take significant advantage of their victim.

When it comes to the misuse of accounts through fraudulent conduct, the risk of money muling has increased by 97% over instances recorded in 2021, the fraud prevention group said.

“This is a significant problem and not only limited to South Africa. Money muling is a significant global risk. Reports from Cifas in the UK point out that money muling funds illegal activity such as money laundering, terrorism and human trafficking. Obviously, this is concerning, particularly within the South African content,” said Van Schalkwyk.

Van Schalkwyk said that biometrics is adding an extra sophisticated layer of security to try and prevent financial crime from taking place. However, this makes fraudsters more insistent and increases the level of involvement from the public as they want to lend a helping hand.

Impersonation

Impersonation has always been a significant crime is South Africa as fraudsters prey on their victims through phishing, smishing and vishing.

“Impersonation increased by 264% for the first five months of the year compared to 2021 and could be linked to recent major data breaches. The various data breaches have all highlighted the vulnerability of personal information and how easily accessible they are to the motivated criminal,” said Van Schalkwyk.

Forged documentation

South Africa has one of the highest reported unemployment rates globally, at nearly 35%. “In an effort to increase employability, we are seeing an increase in false qualifications which has increased by 158% over the cases reported in 2021,” said Van Schalkwyk.

Stats by province

Gauteng is the economic hub of the country and is the province which has the highest fraud stats. The SAFPS pointed out that the province makes up 62% of the country’s total fraud incidents and that the number of fraud incidents that were recorded in 2022 increased by 117% over the number of incidents reported in 2021.

KwaZulu-Natal contributed 18% of the fraud incidents in 2022 and the SAFPS said that the number of incidents reported this year increased by 106% over those recorded in 2021.

“The interesting statistic for the SAFPS is the increase in the Western Cape,” said Van Schalkwyk who points out that there are visible signs of an increase of fraudulent activity in this province. The Western Cape made up 8% of the country’s total fraud incidents and there was a 133% increase over the number of fraud incidents reported in 2021.


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