Angelique Ruzicka looks at new strategies adopted by criminals and finds that many scams are conducted by crooks who are keeping a close eye on their victims
Scammers are becoming more sophisticated and their methods are getting more extreme as they try to find new ways to defraud their victims.
Here are some of the most common types of scams, and some advice on how to avoid being conned:
This is where criminals phone customers and convince them that they work for banks or other legitimate service providers. This is not unique to South Africa. In the UK, a number of people have been conned into believing that callers are from HM Revenue and Customs – Britain’s version of the SA Revenue Service (Sars).
They’re told that they’ve not paid enough tax and are threatened with arrest and court hearings if they don’t pay up.
Victims are scared into transferring money via online or mobile banking portals into the criminal’s account. The money is instantly moved so that it can’t be traced and the transaction cannot be reversed.
The scammers often clone an organisation’s number to make their fraudulent calls seem legitimate. While this hasn’t happened in South Africa yet, experts say there are some criminals who have sent emails and texts purporting to be from Sars.
To make their story sound even more convincing, criminals tend to watch your social media activity.
Manie van Schalkwyk, the executive director of the SA Fraud Prevention Service (SAFPS), relays how one woman got conned after she complained on social media that her cellphone provider had not refunded her money she was owed.
“A woman called the victim and said she worked for the cellular company and would help her. She asked for proof of address, ID and copies of bank statements. The fraudster then applied for loans using the info she obtained from the victim,” says Van Schalkwyk.
“The loan money appeared in the victim’s bank account and the fraudster called to say that she made a huge mistake and paid the wrong amount into her account and asked if she could transfer it back. So now the victim has loans all over the place and she paid the money into the fraudster’s account.”
THE WHATSAPP PYRAMID SCAM
These are introduced by a typically charismatic con artist who talks about an “amazing” financial opportunity that promises unbelievable returns (usually much more than inflation). At first, this is offered exclusively to a small group of investors. Each investor is then encouraged to sign up others (for example, friends, family, acquaintances and colleagues) who, in turn, are also told to sign more people – thus creating a pyramid structure with the fraudster on top getting all the cash from “commissions”.
Phiko Peter, client relationship manager at Allan Gray, explains: “In the digital age, these schemes are administered on messaging platforms like WhatsApp, where messaging groups are created to extend the reach of these schemes far and wide. WhatsApp has proven useful for con artists, who can now communicate efficiently and encourage recruitment with relative anonymity. With the help of digital payments, these schemes operate efficiently.
“By the time the scheme unravels and the truth is revealed, it’s too late,” Peter says.
THE MONEY FLIPPING SCAM
This scam is gaining momentum through social media platforms such as Facebook, Twitter and Instagram. It promises to double or treble your money very quickly. The criminal offering this tantalising investment often boasts about their successes on social media by posting pictures of their plush lifestyle.
Once they’ve convinced you of the deal, they may even lure you further with investment reports and other statements to convince you of the deal’s legitimacy. However, the scam typically unravels once investors demand their money back.
“As soon as the investor requests a withdrawal, they are met with a series of delays and may be asked to fork out even more money to release the funds. This escalates until the scammer deletes their account and ceases all contact,” says Peter.
1. Educate yourself: Aaron Thornton, the managing director of Dial a Nerd, says: “Educate yourselves immediately about the methodologies that are being used worldwide to gain access to data. We send monthly newsletters talking about this, as do many other IT companies, and we always have solutions on offer that one can implement to protect themselves.”
2. Don’t believe the person contacting you: Call the company back directly to verify the request for funds. Van Schalkwyk points out that the victim of the cellphone refund scam missed a vital clue: “Check the fraudster’s email address. In this case, the scammer used a Gmail address that included the name of the cellphone provider. But no Vodacom or Cell C employee would send you an email from a Gmail account.”
3. Protect your data: Van Schalkwyk says: “You need to treat your ID and banking information like you treat cash – be wary of who you give it to. Shred your documents instead of throwing them in the bin.”
4. Be careful where you invest your money: If someone is promising you above-inflation returns with few facts about how the investment works, avoid it. If it’s not regulated by the Financial Sector Conduct Authority, your cash is not protected.
5. Act swiftly: If you’ve lost your ID document or think your data has been compromised, contact the SAFPS. Text the word PROTECTID to 43366 and the SAFPS will contact you and take you through a process of identification, and register you on a list that will alert lenders that there’s been fraudulent activity in your name or on your account.
6. Get advice: Many become victims because they are desperate to make more money and don’t have a financial plan. Peter says: “A good financial adviser will explore your unique set of circumstances and implement a long-term investment strategy to help you reach your financial goals.”