Fraud in 2024 is less about people pretending to be something they are not, and more and more about people using software or digital means to fraudulently gain access to your information or financial assets.
Here are five common forms of online fraud that you should be aware of, and down below I will give you the strategy to limit your susceptibility to being scammed by any of them.
1. Technology support scams
You receive a phone call, email or SMS instructing you to urgently update your app or software to ensure it remains secure. A link is provided to do so, and by following it you inadvertently download a virus which provides access to your phone/computer and information to the fraudster.
2. Package scams
“We have your package but cannot deliver it as there is a customs fee outstanding“. This one is typically delivered by SMS with a link for you to make a payment and avoid your delivery/package being destroyed or returned to sender. Don’t rush to follow the prompts before even considering if you are expecting a delivery, as you will end up making a payment for something that does not exist, and also revealing your credit card details which can then be co-opted by the fraudsters.
3. The threat of FICA-related bank account suspension or closures
We all need to have our FICA up to date to comply with national legislation, however, be aware of emails that claim to be from your bank with a link for you to click and “log in to confirm your latest details” so as to avoid your bank account being suspended or closed. There are even some which request you to upload documents such as your ID and current proof of address.
The links in these emails will take you to a fake website which looks identical to your bank’s login page. Potentially, with no reason to be suspicious, you might log in and in doing so have provided the scammers with your full banking access details and enough information for them to commit identity theft.
4. Celebrity ‘investment’ scams
Even if you are not a celebrity watcher there are certain names that most South Africans recognise, and fraud merchants are making the most of this.
One of the recent schemes doing the rounds hinges on Elon Musk and reads something like: “all you need to do is invest R4,700 and your return of 50% is guaranteed as he wants to help South Africans”.
There have been past scams that cited the involvement of Mark Shuttleworth and Christo Wiese (before the Steinhoff scandal cost him billions), and there are bound to be more in the future. These scams work by enticing you to “invest” – generally a relatively small amount – with the promise of guaranteed returns in excess of what the market is offering, which are supposedly backed by the celebrity’s personal wealth as a way of them giving back to the South African public out of the goodness of their hearts. And, of course, it is too good to be true!
These sorts of frauds are made increasingly plausible due to the ability of Artificial Intelligence (AI) to create deep-fake images and even videos. You may see a video of a celebrity or well-known businessman apparently endorsing a product or investment, when in fact it is not them at all.
5. The traditional call from “your bank’s fraud department”
On a busy day, or even late in the evening, you might receive a phone call with the caller stating that they work in your bank’s fraud department and have noticed suspicious activity on your credit card including purchases at XYZ store (which you clearly didn’t make). They say that you urgently need to provide them with the one-time pin (OTP) that has come through to your phone so that they can assist you in blocking the transaction. Sadly, as soon as you provide that OTP, the fraudulent transaction is processed and you will have little chance of the bank being willing to return your stolen funds, as you voluntarily gave the OTP to a stranger.
So, what are your safeguards against these schemes?
As always, it pays to have a healthy level of scepticism. Don’t be afraid to put the phone down and risk offending someone, your real friends will understand!
In addition, stay aware of the following points:
- Your bank will never phone to ask you to update your details or stop fraud by giving them a one-time pin.
- If in doubt, end the suspicious call and immediately phone the OFFICIAL fraud hotline of your bank or cell phone provider, which you can find on their website or via the app on your phone.
- When an opportunity to “invest” in something seems too good to be true, it generally is too good to be true and you’ll be better off by leaving well alone.
If you’re uncertain about who has contacted you, particularly if you receive a phone call or email with regard to a change to your investment portfolio, don’t hesitate to contact your CERTIFIED FINANCIAL PLANNER® professional at Netto Invest to double-check that it is legitimate.
By Gareth Leonard, CFP® CA(SA)