Wise Up and Watch Out for Schemes and Scams

Norton by Symantec released their latest report1 on online crimes, which shows an average of 21 hours and $358 lost per consumer globally over the past year. As more business transactions such as paying bills, shopping and trading have moved online, people have unfortunately also become more susceptible to online crimes.

“This global trend is no different to what we are experiencing in South Africa, and consumers need to take the power into their own hands by ensuring they are informed on how to protect themselves, especially when doing business online, ,” says Kalyani Pillay, CEO of South African Banking Risk Information Centre (SABRIC).

Due to ongoing reports from bank customers in this regard, SABRIC, on behalf of its member banks, launches the “Schemes and Scams Campaign” during which awareness will be created in phases to empower citizens.

The first phase focuses on the following scams:

1. Fraudulent Change of bank account details scam

The scam operates by an innocent recipient receiving an email or letter informing them that a particular supplier of theirs has changed their bank account details. The correspondence will include the details of the new account. You will be asked to make future payments into the new account. These details are fraudulent with the consequence that monies are paid to the fraudster and not the supplier.

In certain instances, the fraudsters also phone the victims informing them of the change of details and that a letter will follow. The telephone call will be used by the fraudster so that they can extract more information to make their communication more believable.

Criminals use social engineering to accumulate information in order to commit fraudulent acts. Unfortunately, the victims are not only corporates, but also their clients and partners. “As with personal information, corporate information needs to be protected as well,” advised Pillay. Social engineering refers to the psychological manipulation used by criminals to get their victims to disclose personal/confidential information. “In a day, a company could lose vast sums of money through the ‘Fraudulent Change of Banking Details’ scam,” said Pillay.

Awareness tips on how bank consumers can avoid falling victim:

  • Maintain a good relationship with existing suppliers and know your contacts so that you are able to liaise with them when required.
  • If called by a ‘supplier’, ask to speak to your known contacts and do not take instructions from staff at the supplier who are not known to you.
  • Beware of supposedly confirmatory e-mails from almost identical e-mail addresses, such as .com instead of .co.za, or addresses that differ from the genuine one by perhaps one letter that can be easily missed.
  • Instruct staff with the responsibility of paying invoices to scrutinise invoices for irregularities and escalating suspicions to a known contact.
  • Ensure that your company’s private information is not disclosed to third parties who are not entitled to receive it, or third parties whose identities cannot be rightfully verified.
  • Rather shred your business and suppliers invoices or any communication material that may contain letterheads, than discarding these in rubbish bins.

“Staff alertness and attention to detail, such as noticing slight tweaks in e-mails addresses or other contact details is another preventative measure of these business scams. Should you fall victim to this type of fraud, it is important to contact your Bank immediately so that they can assist you to stop any payment, where possible”, says Pillay.

2. Deposit and Refund Scams

The Deposit Scam

A criminal orders goods or services from a business and makes a payment into the victim’s account, mostly by means of a fraudulent cheque. Proof of payment is then sent to the business and goods are delivered to the criminal. When the Bank processes the cheque, it is uncovered that the cheque is fraudulent and as a result no funds are transferred to the victim’s account. The victim is thus out of pocket as they do not have the goods nor the money. In other instances the order is cancelled and an urgent refund is requested. Alternately a payment is made in ‘error’ and an urgent refund is requested.

The Refund Scam

This scam is characterised by a fraudster requesting a quotation for a specific service or goods. ‘Payment” is then allegedly made and proof of payment is then provided for an amount that far exceeds the quotation. For example, if the quotation is for R2990, the fraudulent deposit would be for R22 990. The supplier’s office would then be contacted to alert them to the mistaken overpayment and an urgent refund would be requested. The service provider will go through their records and notice that indeed an extra amount has been paid into their bank account and they will make the urgent refund of the “overpayment” of R20 000. After some time, they will notice that the deposit is reversed by the bank because payment was made with a fraudulent cheque that was subsequently not cleared by the bank. The service provider suffers the loss because effectively, they have refunded money they never actually received.

Awareness tips for consumers to avoid falling victim:

  • No ‘refund’ should be made without first verifying with the Bank that the deposit that has been made into your account is indeed valid.
  • In addition, you should wait for all cheque deposits to first be cleared before handing the goods over to a depositor.
  • Take great care to protect personal information and that of your company. It is through access to this information that perpetrators gain access to you and your organisation.
  • Staff dealing with finance in your organisation should be educated about such scams.

For more tips on online schemes and scams, please visit www.sabric.co.za, follow @Sabric and watch out for #Skelm.

To arrange for interviews, contact:

Media and communications Manager
Tel: +27 11 847 3134
Cell: 082 070 5349
Email: media@sabric.co.za

Notes to Editors:

SABRIC is a NPF company formed by South African banks to support the banking industry in the combating of crime. SABRIC’s clients are South African banks and major CIT companies. Its principle business is to detect, prevent and reduce organised crime in the banking industry through effective public private partnerships. SABRIC co-ordinates inter-bank activities aimed at addressing organised bank related financial and violent crime and acts as a nodal point between the banking industry and others, in respect of issues relating to crime. The creation of public awareness of various bank related crimes and educating the public on how to protect themselves is one of SABRIC’s key focus areas. For more on SABRIC visit www.sabric.co.za