SA digital banking fraud soars 75% in a year

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Incidents of digital banking fraud soared in 2018 as criminals used increasingly complex ploys to steal money from customers, according to the South African Banking Risk Information Centre.

Sabric released the result of its 2018 crime statistics study on Wednesday in Johannesburg.  

It found that reported incidents of digital banking crime grew by 75% to 23 466 between 2017 and 2018. A total of R262.8m was lost to digital fraud in 2018, compared with R250.5m in 2017. Digital crime as a category includes digital, mobile and app banking.

The largest relative increase over 2017 was related to bank app fraud said Sabric. While 4 790 incidents costing R57.5m were reported in 2017, this increased to 7 445 incidents at a cost of R104.8m last year. 

Sabric said banking app fraud was not caused by banking app software being compromised, but rather by "social engineering tactics like vishing".

Vishing, or voice phishing attacks, occurs when fraudsters pose as bank or service providers and try to get unsuspecting victims to disclose personal information to steal their money.

As the use of dedicated bank apps has increased, so has fraud. Sabric said scammers use vishing to obtain transaction verification tokens. These include one-time passwords (OTPs), or random verification numbers (RVNs). They then use this information to defraud clients.

Online and mobile fraud

South Africans lost a total of R129m to online banking fraud in 2018. In such fraud criminals often using phishing emails that request users to click on a link in an email. This "directs them to a 'spoofed' website designed to mislead them into thinking that it is their legitimate bank website, to obtain, verify or update contact details or other sensitive financial information," red Sabric's report. 

A total of R28.9 was lost to mobile banking fraud. Here "SMS phishing" is the preferred method to defarus users. 

"It is much the same as phishing, except that instead of emails, text messages are sent requesting that the recipient call a number," said Sabric.

The center noted that enhanced detection measures put in place by banks to curb mobile fraud lea to a decrease in incidents in the fourth quarter of 2018. .

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