Prevent online fraud

2019-12-17 06:00
You don’t want to log onto your bank’s website and find all your money is gone and all your accounts are deep in debt. You can avoid the misery of being a victim of online fraud.

You don’t want to log onto your bank’s website and find all your money is gone and all your accounts are deep in debt. You can avoid the misery of being a victim of online fraud.

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Online banking has opened up a world of convenience for consumers. Unfortunately, it seems the same applies to fraudsters.

Lt Col Ivan McLean of Claremont police station says their station had 10 to 12 reports of online fraud in November alone. Sgt Charles Roberts of Wynberg police station says quite a few cases of electronic fund transfer, email and ATM fraud have been reported to them as well.

Companies and consumers are being defrauded of huge amounts of money, ranging from R10 000 to R1.5 million.

McLean says there are different twists to scammers’ modus operandi, but it usually starts with a very legitimate-looking email, informing buyers that the banking details of the companies they are doing business with have changed. “The criminals make use of Photoshop to duplicate official letterheads in emails. In some cases they even list a fraudulent contact number,” he says.

In a nutshell, buyer A submits an order via email to company B, agreeing to make an eft payment. Then buyer A receives a fake email from a fraudster masquerading as company B, saying its banking details have changed. Buyer A continues to deposit money into the fraudulent account.

Now one of two things happen. Either the buyer never receives their products, and only finds out on inquiry that their email has been hacked or the fraudsters take it one step further.

A fake payment is made to company B’s account using a fraudulent cheque or by placing a hold on a transfer only to cancel it a day or two later. Company B, seeing a payment reflected on its account, dispatches the product to buyer A. Only later will they discover the payment did not clear. By the time company B realises its mistake, the fraudsters, and the money, are already in the wind.

McLean says that while fraudsters target online purchases from companies and websites across the board, there are two common denominators – the fraudulent bank details sent to buyer A is usually a Capitec account and the fraudulent payment made to company B is usually a cheque payment.

McLean says they suspect fraudsters are paying off poor people in exchange for their ID information which they then use to open dummy accounts. But, he says it is difficult to prove.

Charl Nel, head of communications at Capitec, says although the bank makes it convenient for clients to open accounts, it follows strict identity recognition procedures.

“Simplicity is our motto, so it is easy for clients to open an account at one of our branches. However, unlike some of the other banks, we do not open new accounts online. Clients have to come into one of our branches with their ID.”

Nel explains when a new account is opened, a biometric device with 21 points of contact is used to scan the applicant’s fingerprints. It is then sent to Home Affairs to verify the ID belongs to the person opening the account.

A photograph is also taken of the client. Only then are they handed a bank card and a pin.

According to Nel, there is no way for the bank to tell beforehand whether the account is going to be used for criminal activity.

“Only after the deed has been done can we freeze the account but by then the damage is done,” he says.

Nel says the promise of payment could entice vulnerable individuals, but warns people of the ramifications of giving their account details to criminals.

“Once we have been informed of a fraudulent account, we immediately close it and share the account holder’s information with law agencies. That person will also never be allowed to open an account with Capitec again,” says Nel. 

McLean says fraudsters are difficult to track down and there is little recourse for buyers and companies once they have been conned. He says the responsibility lies with the individual to first confirm that the banking details are credible before he or she transfers money or dispatch goods. He recommends that people avoid doing transactions over email and rather go to the company’s premises or do business over the phone. 

“Before you make a payment, ask for an invoice from the company you are doing business with to confirm the bank details is correct, insist on clarity,” he says. 

In the case of electronic transfers or cheque payments, he advises that clients or companies should wait for the payment to clear before they dispatch products or reimburse money.

  •  To report online fraud, contact Claremont or Wynberg police stations on 021 657 2250 or 021 799 1300.
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