South Africans are getting better at spotting fraud

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South Africans may be getting better at recognising scams, but criminals are becoming more sophisticated and launching attacks on an unprecedented scale, says Thalia Pillay, CEO of fraud prevention company Orca Fraud.

The Global Anti-Scam Alliance’s latest State of Scams in South Africa report found that 85% of adults encountered a scam during the past year. The same percentage expressed confidence in their ability to recognise one, although half continued interacting with the scammer.

Read/listen: Outdated fraud systems cost SA banks R2.6m annually

Almost one in five respondents suffered financial or data loss, yet just 6% reported the incident to the authorities.

More than three-quarters of victims said the experience affected their mental wellbeing, while 53% were targeted again.

“It’s a mixture of both,” says Pillay when asked whether consumers are becoming more alert or criminals are simply getting better at defeating their defences.

People may know how to identify familiar scams, but they are being confronted with a growing range of attacks involving the South African Revenue Service, traffic fines, romance scams and fake investments.

AI removes red flags

Artificial intelligence has removed many of the warning signs that previously exposed scams, such as poor spelling and grammar.

Criminals can now produce highly personalised messages in local languages using information gathered from data breaches and other sources.

“AI has made it easier than ever to scam people at scale,” says Pillay.

Orca Fraud, which monitors about R82 billion in transactions a month across more than 70 countries, is seeing voucher fraud emerge as one of the most common forms of financial crime in South Africa.

Read/listen: How Zelda la Grange fell for a sophisticated phone scam

Vouchers for online gaming, food delivery and other services can be purchased easily and used to move or launder stolen funds with limited traceability. Criminals may shift money between bank cards, cryptocurrency and vouchers before investigators can intervene.

Crypto’s dual role

Cryptocurrency is also playing a dual role.

Some victims are drawn into bogus crypto investments over periods of 12 to 18 months, with scammers often targeting people over 65 and persuading them to invest their life savings. Crypto is also used to move stolen money offshore.

While blockchain transactions can be traced, speed is critical because funds may pass through several wallets and jurisdictions within minutes.

Read/listen:

How ‘money mule’ scams work
Imagine getting scammed by your own son

Pillay says fraud syndicates are becoming increasingly organised, using networks of money mules, SIM farms and fake call centres.

Criminals may impersonate a bank’s fraud department and convince victims to disclose card information or one-time PINs under the pretence of protecting their accounts.

What to do after fraud

Anyone who discovers fraud should immediately contact their bank’s official fraud department, cancel physical and virtual cards, and check cards stored on delivery and shopping applications.

A case should also be opened with the police.

Pillay recommends using separate virtual cards with low limits for subscriptions, delivery applications and higher-risk online purchases.

Consumers should also remain cautious after losing money. Fraud victims are sometimes approached by fake recovery services that promise to retrieve the stolen funds, only to defraud them again.

For previous Moneyweb Crypto Pod episodes, click here.

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