Do you remember the famous ‘inheritance scam’? Now common via email or even SMS, it was being run via the postal service back in the day. Fraudsters are nothing new, they just have more advanced ways these days of trying to prise open your bank account.
Pushing the panic button via fear
Our emotions are the fastest way to hijack the logical side of our brains and fear of loss or hope of a gain are two of the scenarios that scammers use. Stay aware of the common scams that are taking place and follow these tips to avoid falling victim to scammers.
Common scams and online fraud techniques in 2023
Email hacking (scammers could have obtained your password(-s) through phishing techniques or data breaches)
Fraudsters hack your email address and wait for a juicy opportunity such as a property purchase. Once presented, the fraudster intercepts the email containing the conveyancing attorney’s bank account details and substitutes their own account details instead. You receive an email you are expecting from a legitimate source and make payment into the fraudster’s bank account.
SIM card swaps or cloning
If a fraudster has access to your personal information and a copy of your ID, it is fairly simple for them to take over your mobile phone SIM card. Once they do, they will receive all your messages and confidential notifications such as your banking notifications, which can be used in combination with login information to steal your funds.
“Erroneous deposit” refund scams
You receive an SMS notifying you that a payment has been made into your account which looks legitimate and appears to be from your bank. This is followed by a phone call and someone notifying you that they have made a payment to your account in error requesting you to refund it to them. They may even sweeten the deal and offer that you keep 50% of the money as a gesture of goodwill. The reality is the payment never happened, it was only the message that was created and sent.
Vishing scam
You receive an alleged call from the bank notifying you that there has been some irregular activity on your account and that you must act with urgency or else the fraudster will drain your bank account. They then use the opportunity to extract personal information such as your bank account details, passwords or OTP for a transaction from you which is used to access your accounts and steal your funds.
How to avoid falling victim to scams
- Approach every payment as if it could be fraudulent. If you know you need to make a significant payment to a new beneficiary, ensure that you always verify the account details with the beneficiary ahead of time and telephonically (using a legitimate phone number to check up) before payment. You can also use the bank’s verification system to verify account details. For large payments to new beneficiaries, you can transfer a small amount and then confirm receipt before sending the balance.
- Always be suspicious when someone calls from the bank or a financial services company. A good rule is to always put down the phone if you are unsure and to phone the fraud department or business directly (again, using a phone number you know to be legitimate to check up) to verify that activity has taken place.
- Be careful when you use (free) public Wi-Fi connections such as those in coffee shops, shopping centres or airports. Hackers can access your data that way. It may be better not to connect to public Wi-Fi connections at all.
- Change your passwords regularly and add two-factor authentication to all your important accounts as an added security measure. There have been many data breaches which have exposed login information.
- Never share your bank password or OTP pins with anyone.
- When making online payments pay with credit cards, if possible, as they have stricter rules that make it easier to get refunded if there is fraudulent activity.
- Be vigilant on email and online;
- Look for the security padlock sign when accessing a website (it will appear before the URL / website name in the browser bar).
- Don’t click on links if not from a trusted source.
- Ensure emails are from the sender and not cloned emails.
- Use strong passwords of 13 characters or more using UPPER CASE, lower case, numb3rs and symbo£s. The table below is a useful motivation for strong passwords.
Stay vigilant and educated about online fraud and you should be in a position to avoid any of these scams if they ever cross your path.
And, of course, apply all these precautions when interacting with your CERTIFIED FINANCIAL PLANNER® professional and their team when implementing your investment plans.
By Michael Maré, CFP® FPSA®
B.Com