South Africa is Experiencing All Time Highs in Bank Fraud

South Africa is Experiencing All Time Highs in Bank Fraud
South Africa is Experiencing All Time Highs in Bank Fraud. Photo: Pixabay

A new study from Columinate has highlighted the current state of digital bank fraud in South Africa, and it is not an encouraging picture. The group based their report on the responses of some 13,000 South Africans who make use of the countries digital banking system. The questions about e-banking were designed to give a clearer picture of both the way the average customer uses the banking system and their level of exposure to scams.

App Attacks

South Africans across different age groups and demographics have shown a preference for avoiding a trip to a physical bank branch at all costs. Whether they are opening an account or requesting other services, South Africans will do so digitally and remotely if they can.

But digital banking is a very different beast to traditional banking, both for customers and for banks. This difference is laid bare when it comes to security. Digital banking scams and fraud are now at an all-time high, and the trend seems to be showing no signs of abating.

What Are the Most Common Scams?

When we think of attacks against digital banking networks, many people think of hackers exploiting vulnerabilities in computer systems. However, research shows it is the other way around – it is the people, either banking customers or bank staff, who are the actual weak point. The majority of banking scams perpetrated today rely on the manipulation of humans, not machines.

Despite the growing awareness amongst South Africans regarding the dangers that banking scams pose, 22% still report having fallen victim to them, with a presumably much higher percentage being targeted. While many of the scams used by criminals have been tried and tested for years, there have also been some new scams detected.

  • Scams involving a supposed pre-qualified loan or credit agreement affected 13% of respondents.
  • 8% were tricked by scams in which attackers informed them they had won some kind of competition.
  • More than a third (36%) of respondents were targeted by phishing scams, with 7% of all users falling for the scam.
  • 4% fell for new variations of the classic “Request for help” scam.

How Can Customers Protect Themselves?

The key to avoiding falling victim to a banking scam, such as the ones described above, lies in the ability of customers to educate themselves and prepare. With knowledge of what to look out for and which steps are the most effective in staying safe, South Africans will be in a much better position to protect themselves from potential attackers.

Don’t Disclose Personal Information

Never pass on any personal information, no matter how harmless it seems, to anyone other than a verified member of staff from your bank. Even if they do work for your bank, or claim to, you should never give them your passwords or your PIN number, because a legitimate bank will never ask for such details. If you need to relay sensitive information to your bank for any reason, you should do so in person if possible.

Keep Information Secure

For many years, we were all told to never write our passwords down. However, this advice is now considered outdated. Of all the ways an attacker may get access to your account these days, assuming you don’t leave your login details on a post-it note on your computer screen, stealing handwritten notes is very unlikely. As long as you keep the piece of paper with the information safe, it will remain safe.

You can also use a simple app on your smartphone to encrypt and password-protect text files. You can then keep sensitive information written in these, safe in the knowledge that only you can ever read it.

Use a VPN

We’ve all gotten used to managing our finances on the go, and most of us think nothing about signing into a public Wi-Fi network to access our online banking. However, while this is relatively common behavior, you should never log in to your internet banking on a public Wi-Fi network!

That rule cannot be overstated enough. It is ludicrously easy for an attacker to intercept information over such a network or to pose as an access point and have people hand it over to them. A virtual private network (VPN) is a service that your device will connect to, encrypt your data and will interface with the internet on your behalf. All communications between you and the VPN server are encrypted, meaning that if they are intercepted, they cannot be read. A VPN will also keep your device’s IP address and physical location hidden.

We all need to be more vigilant regarding the increasing number of bank scams and frauds. Fortunately, taking just a few simple steps can make you a lot safer.