Cape Town – Ahead of the festive season the Financial Sector Conduct Authority (FSCA) has warned consumers against banking scams and is urging vigilance and caution when paying for purchases either in-store or online.

The authority said it had noted a rise in the number of alleged reported scams and fraudulent activities experienced by financial customers.

Advising on steps to take if consumers think they have been scammed or suspect a scam, FSCA spokesperson Kedibone Dikokwe said people should report the incident directly to their bank via their fraud hotline.

“You should also reverse the respective payment or stop any debit orders and report the fraudulent transaction to the company behind the money transfer, for example an online shopping store.

“If you feel that you have been treated unfairly, ill-treated or suffered loss as a result of the treatment by your bank, you can lodge a complaint in writing directly to your bank.”

She said if after lodging complaints with their banks, customers were still unhappy they should contact the Ombudsman for Banking Services (OBS).

Ombudsman Reana Steyn said consumers should regularly go through their account statements in order to identify and immediately report any suspicious entries that they flag as suspicious.

“Desktop research conducted by the OBS has shown that social media platforms, online marketplaces and unsecure websites are being used by criminals to execute a scam where an unsuspecting customer is tricked into paying in advance for goods or services that they will never receive.

“In the first quarter of this year, South Africa was also the worst affected on the continent in terms of targeted ransomware attacks, which can affect businesses and critical infrastructure.

“Banking accounts are one of the most targeted platforms when a consumer falls victim to cybercrime,” Steyn said.

Experts say that while the online payment space in South Africa has flourished ever since the advent of the Covid-19 pandemic nearly two years ago, an adverse effect is that the threat of online fraud facing businesses and consumers is growing.

Technology and financial gateway service provider PAYM8 chief executive Andrew Springate said: “The increase in online fraud has led a number of organisations and consumers to be more exposed to cybercrime.

“All four major banks have seen massive increases in these payment methods since the start of the pandemic. Absa, for one, says 66% of people now prefer electronic payments over cash.”

Digital security solutions developer LAWtrust business analyst Riaan de Villiers said: “The global Covid-19 pandemic, which has led to more organisations transitioning to work remotely, has magnified online fraud.

“While the use of the internet’s various online services simplify consumers’ daily business functions, one must exercise caution to guard against these online fraud attempts.”

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