Cyber criminals are taking advantage of the anxiety around lockdown. Manie van Schalkwyk, Executive Director of the Southern African Fraud Prevention Service (SAFPS) provides some insight into what scams to watch out for.
The world is currently a very scary place. South Africa is facing massive levels of unemployment, and its citizens have been disrupted from their daily routines. This has caused heightened levels of anxiety.
Criminals are aware of this anxiety and take advantage of the desperation that is starting to grow. The public needs to be aware of the following scams which are starting to become more prevalent.
When comparing incidents that took place between February and May 2020 with 2019 statistics from the same period, total fraud incidents fell by around 8%, with incidents in April falling sharply to half of the 12-month average.
This is due to the fact that less credit was extended as a result of the lockdown. However, this changed sharply once lockdown was eased in May.
Impersonation saw a sharp increase, and misuse of bank/loan accounts rose from 2% of incidents to 23% of incidents. The unsecured lending industry saw their fraud incidents more than double, accounting now for more than 15% of all fraud incidents.
The main fraud trends are:
- Interception of emails from contacts containing details which would then be changed
- Requesting admin fees be paid before a successful loan application or lottery winnings could be paid out
- Requesting deposits before vehicles, animals or other goods are delivered
A recent survey, Fraud in the wake of COVID-19: Benchmarking Report by the Association of Certified Fraud Examiners (ACFE) found that anti-fraud professionals expect an even greater shift in the overall fraud level.
The threat that has risen the most during the COVID-19 pandemic is cyberfraud, which includes schemes such as business email compromise, hacking, ransomware, and malware.
The loan scam
Criminals are frequently using SMS and WhatsApps to offer cheap loans to customers. Customers are then requested to pay an amount upfront to get the loan, which is an immediate red flag that it is a scam. If you receive such an offer, be aware that fraudsters are targeting you.
Several major companies, such as Direct Axis, Bayport, Wonga and Bidvest Bank have had their names used in fake emails. The practice is damaging these organisations’ brand as consumers are under the impression that the real organisation is behind these actions.
Fraudulent insurance claims
There is a definite correlation between tough economic climates and certain insurance policyholders trying to take advantage of the situation and defraud their insurers. One of the trends we are seeing in the market is an increase in fake death claims. The Insurance Crime Bureau also warns their members against scams within the credit life industry.
Risks of working from home
Companies have been forced to allow their employees to work from home. This has unfortunately opened the door for cyber criminals as the security of home internet networks is not as advanced as those of corporate internet networks.
Hackers and cyber criminals are taking advantage of COVID-19 by sending fraudulent emails that look legitimate and attempt to trick victims into clicking on malicious links or opening attachments.
There has been a big increase in phishing and SMS scams that prey on the increased reliance on digital tools. The main objective is for criminals is to get hold of your information, which is usually followed by account takeovers. These criminals are looking to commit insurance, banking or donations fraud related to COVID-19.
Companies also facing attacks
Companies also face significant risks as fraudsters are approaching clients, usually businesses, purporting to be suppliers and advising that their banking details have changed and requesting payments to be made to a specific account number.
In more sophisticated cases, legitimate suppliers’ email accounts are hacked and used to send emails advising of the change in banking details. Losses are usually quite extensive due to high business transaction values.
Where large financial institutions (such as banks) have multiple call centres, fraudsters are approaching various call centres posing as clients to change one piece of customer information at each call centre. Fraudsters might contact the home loan department to change a telephone number and the vehicle financing department to change an email address, and in so doing, they change the view of the customer without being detected in a single point of contact.
If it looks too good to be true, it is
Unfortunately, criminals are smart and ruthless and will not think twice about taking advantage of a distressed individual who is experiencing a lot of risk or is going through a lot of pain during this time.
We need to be aware of our surroundings and always remember: if it looks or sounds too good to be true, it probably is. View everything with a critical eye and you will be saved from fraudsters.
This article first appeared in City Press.