Category Fraud/Crime

Local consumers warned of rising financial fraud

24 August 2020 RCS Group
Balraj Dev, Chief Risk Officer at RCS

Balraj Dev, Chief Risk Officer at RCS

While the incidence of cybercrime in South Africa has increased gradually over recent years, research suggests that digital financial fraud may see a sudden surge of up to 80% this year, as more consumers and businesses have turned to online interaction amid the COVID-19 crisis.

With increased digitisation exposing South Africans to more advanced types of fraudulent activity, preventing and minimising the risk of financial fraud has never been more important.

This is according to Balraj Dev, Chief Risk Officer at RCS – a subsidiary of BNP Paribas Personal Finance – who says that digital crime and card fraud are the two most common types of fraud committed against South African consumers. “Online banking, banking apps and mobile banking are the most common platforms that enable digital financial fraud. Card fraud, on the other hand, usually happens when credit or debit cards are compromised through account takeovers, counterfeiting, false applications, lost or stolen, card not present (CNP), or when cards are not received or issued.”

Dev notes that while these crimes are becoming increasingly sophisticated, some very simple precautions go a long way to protect consumers from fraudsters. “When using a bank card at an ATM or bank, never disclose your PIN or password to anyone claiming to help you. Once your transaction is complete and you have cash in hand, be cautious of anyone attempting to distract you. Finally, avoid using handheld devices immediately prior to, or after using an ATM – this is an opportunity for fraudsters to use card skimming devices or to swap your card without you even realising it.”

When it comes to online banking, Dev says that consumers need to be even more vigilant. “In addition to only using registered banking apps, consumers should educate themselves on how phishing and vishing scams are typically presented so as not to be caught out. Such attempts often occur through emails and phone calls by fraudsters who claim to be long-lost family members; a new love interest; a bank official; a fictional charity; or a false debt collector stating that a deceased family member has outstanding debt.”

There is also a credit scam that Dev says is gaining momentum across South Africa, whereby fraudsters are taking advantage of consumers in financial distress by offering them high-value loans. “Under the guise of reputable South African credit providers, these criminals appear to be targeting vulnerable consumers via email, with a loan offer – of up to R1 million – attached. In order to secure the loan, victims must pay an upfront fee of up to R10 000 or more.”

He cautions, however, that a reputable credit provider will never ask for an upfront payment to secure a loan. “All official loans are valued according to a person’s specific risk profile, which is based on their credit score and credit history, as well as a number of other factors. A loan amount can therefore never be guaranteed before a proper profile analysis has been done.”

In addition to this, Dev notes some other tell-tale signs that consumers can look out for to ensure they do not fall victim to credit fraudsters. “In these scams, the brand logo is usually distorted and there is seldom a telephone number provided in the email attachment. This should be a major red flag, as any reputable credit provider will always include contact details on an official loan offer.

“But red flags aside, financial fraud is ever evolving, so consumers must make it a priority to stay up to date with the latest scams and threats to their financial wellbeing,” he adds. “Especially now, when times are tough and so many people are under severe financial pressure due to the ramifications of the COVID-19 pandemic.

“It is unfortunately during times like these, that fraudsters become most active and try to exploit the most vulnerable among us. This is why consumers must never become complacent, and always keep a lookout for news or warnings about financial fraud,” concludes Dev.

Quick Polls


Financial behaviour experts suggest that today’s risk modelling methodologies ignore your client’s emotional ability / behavioural capacity. What are your thoughts on spicing up risk profiling tools to make allowance for your client’s financial behaviours


[a] Bring it on; my client’s make too many irrational financial decisions
[b] Existing risk profiling tools are adequate
[c] Risk profiling tools should be based on the model / rational client
[d] The perfect risk profiling tool is science fiction
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