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6 Common Financial Scams

Protect yourself from these 6 common financial scams designed to cheat you out of cash.

 

As more and more of our banking, shopping and general personal admin is done online, cyber-criminals and fraudsters are becoming increasingly sophisticated in how they target individuals in order to steal your personal information and scam you out of your hard-earned cash.

 

Here are 6 common financial scams you should be aware of:

 

  1. Phishing, Smishing and Vishing scams

 

These scams are becoming increasingly common as cybercriminals target individuals to gain access to their bank accounts.

 

  1. Phishing: A fraudster poses as a legitimate company or person and tricks you into sharing sensitive information via an attachment or link emailed to you.

 

  1. Smishing: This scam is similar to phishing, but the fraudster uses an SMS to trick you into sharing sensitive information.

 

  1. Vishing: A cyber-criminal poses as a legitimate agent to persuade you to transfer money over the phone using various dishonest means. The fraudster may pretend to be calling you from the Bank to alert you of fraud on your account, they will then trick you into sharing sensitive information and OTPs to make illegal purchases.

 

How to avoid these scams:

  • Remember, we will never request that you share sensitive data by phone, email or SMS. This includes passwords, PINs and One Time Pins (OTPs).
  • If you receive any suspicious emails, delete them from your inbox immediately.
  • Delete suspicious SMSs from your phone immediately.
  • To stay safe, always verify unexpected phone requests by calling our 24-hour fraud hotline on 0800 020 600 (South Africa) or +27 10 249 0100 (International).

 

 

  1. Fake Money Transfer scams

 

Fake Money Transfer scams, also known as Deposit and Refund scams, involves an attempt to steal goods or services without making the necessary payments.

 

Scammers will order goods or services from you or your business and supposedly make a payment into your account. This is done mostly by means of a fraudulent or stolen cheque or a fake money transfer.

 

They will then either receive goods they haven’t paid for or ‘change their mind’ and request a refund, which you will pay believing their money is in your account.

 

How to avoid this scam:

  • Never make a refund without verifying with your bank that a deposit is valid.
  • Wait for all cheque deposits and money transfers to clear before providing goods or services.
  • Protect your personal and company information at all times.
  • Make use of Standard Bank’s Escrow Service, which makes every buyer and seller trustworthy. If you’re a buyer, our Escrow service safeguards your funds in a trust until the seller delivers what was promised. If you’re the seller, you can also have peace of mind as the trade will only start when the buyer has the agreed funds.
  • If you detect any suspicious behaviour, contact Standard Bank’s Fraud Centre on 0800 020 600 (South Africa) or +27 10 249 0100 (International).

 

  1. Pre-Approved Notice Scams

 

A Pre-Approved Notice is typically granted for bank loans and credit cards. It’s based on the fact that you’ve met basic eligibility criteria to apply for a credit card or loan. If the offer is from a respected institution or your bank and aligns with your current financial goals, it could be exactly what you are looking for.

 

Unfortunately, many unscrupulous fraudsters use fake pre-approved notices to lure in victims and then request upfront fees or cash payments to activate the ‘loan’.

 

Victims make these payments, however, the loan or credit card never materialises.

 

How to avoid this scam:

  • Be wary of ‘100% guarantees.’ Pre-approval means you can apply for a loan, not that you will necessarily get it.
  • Do not make any upfront or cash payments to activate a loan or credit card.
  • Check and double-check all contact information. If this information is difficult to find, be wary of the offer.
  • If the offer is urgent and requires immediate action, rather walk away. Urgency is a good indication that the offer is a scam.

 

  1. Debt-relief and credit-relief 

 

COVID-19 has left many people in a dire financial situation. Over-extended credit and increasing debt is causing stress, and any debt and credit relief is welcome.

 

Unfortunately, fraudsters are very aware of this fact, and they’re using it to offer debt and credit relief that are scams.

 

These scams offer additional credit or promise a quick fix for bad debt and credit records for a fee.

 

How to avoid this scam:

  • It is illegal to request or take money upfront in exchange for a loan, which means that a business that requires an upfront or cash fee before releasing an urgent short-term loan is a scam.
  • It’s important to know that no unauthorised person, company or even lawyer can remove negative data from credit bureau records.
  • Legitimate credit providers will not advertise or communicate with you via social media or Whatsapp without disclosing their credentials.
  • All credit providers must be registered with the National Credit Regulator (NCR). If you cannot find – and check – an NCR number, do not trust the credit provider.
  • Before you make any decisions, phone the credit provider or credit bureau back. Many scammers pretend they are from legitimate companies and use emails and letterheads that appear real – thorough checking will reveal it’s a scam.

 

  1. Change of banking details 

This scam typically targets businesses. The fraudster impersonates an existing supplier and sends a communication (either via email or letter) to the business advising them that the supplier banking details have changed.

 

The banking details are fraudulent and will lead to all future payments being processed into the fraudster’s account instead of the supplier’s legitimate account.

 

How to avoid this scam

  • Maintain a good relationship with existing suppliers and make sure you know the identity of the person you are dealing with at all times.
  • Confirm any change of banking details with the contact you usually deal with at the organisation before making any changes to beneficiary accounts.
  • When calling the organisation to confirm the changes to banking details, use the email or phone number you have on record, and not the contact details provided on the change of banking details notification.
  • The question of whether well-known companies would change their banking details without notifying people through more formal channels.
  • Beware of confirmatory emails from almost identical email 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 responsible for 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.
  • Don’t discard communication material intact such as letters or invoices that may contain letterheads (yours or your suppliers’) without shredding or destroying it.

 

  1. Vehicle purchase scams 

Online vehicle marketplaces have become common. Unfortunately, criminals use this fact to advertise fake vehicles online at discounted prices. These fake advertisements usually include photos matching the description of the vehicle and a phone number or email address to contact the supposed seller.

 

Once contact is established, the criminal sends the intended buyer additional photos, along with convincing explanations for why the vehicle’s price is discounted and why the transaction should be concluded urgently.

 

After the buyer has paid for the purchase in full, they don’t receive the vehicle and when they try to make contact with the online seller, there is no response. The ‘seller’ has disappeared, and their money is gone.

 

How to avoid this scam

  • Don’t trust websites you do not know.
  • Don’t fall for offers that are available at a very low price. If a deal seems too good to be true, it usually is.
  • Protect yourself with Standard Bank’s Escrow Service, which makes every buyer and seller trustworthy. If you’re a buyer, our Escrow service safeguards your funds in a trust until the seller delivers what was promised. If you’re the seller, you can also have peace of mind as the trade will only start when the buyer has the agreed funds.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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