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2024-01-06 8:25 AM

How to Stay Safe From Financial Scams in South Africa 2024

By Lethabo Ntsoane

Financial scams can happen to anyone, regardless of their education or income level. In South Africa, as in many other parts of the world, the threat of falling victim to scams is real and requires proactive measures. Recognizing the need to stay informed and vigilant, here are key strategies to help you stay safe from financial scams.

Accepting Vulnerability: A Crucial First Step

Tony Nkuna, President and CEO of the ICG Security Company, emphasizes the importance of acknowledging our vulnerability to scams. In South Africa, individuals from all walks of life can be targeted, and understanding this reality is the first step towards protecting oneself.

Verify with Your Financial Institution

Hang up and ‘go to the source’

If you receive unexpected calls or messages claiming to be from your bank or a familiar company, exercise caution. Scammers can be persuasive and may even spoof the caller ID to appear legitimate. Instead of continuing the conversation, hang up and independently verify the communication.

Action Steps for Verification
1. End the Call: If the contact is unsolicited, terminate the conversation immediately.
2. Use Verified Numbers: Call your financial institution using verified contact details to confirm the legitimacy of the communication.
3. Visit in Person: In cases of uncertainty, consider visiting your bank in person for clarification.

Allen der Burger, a small business owner in Port Elizabeth, shared his experience of receiving a suspicious payment request. By visiting his bank in person, he uncovered the scam, cancelled his accounts, and prevented potential financial loss.

Secure and Monitor Your Accounts

Basic online security practices play a crucial role in safeguarding your financial information.

Protect Your Accounts

Enabling multifactor authentication, creating unique passwords, and avoiding the sharing of sensitive details online are essential steps recommended by experts like Eva Velasquez.

Online Security Practices
1. Multifactor Authentication: Add an extra layer of security to your accounts by enabling multifactor authentication.
2. Unique Passwords: Create strong and unique passwords for each of your financial accounts. Avoid using easily guessable information like birthdates.
3. Avoid Sharing Personal Details Online: Be cautious about sharing sensitive information, such as your birthdate, on online platforms.

Jason Zirkle, Training Director at the Association of Certified Fraud Examiners, suggests actively monitoring your financial accounts. Regularly checking for unauthorized transactions and investigating any unidentified charges can help detect potential issues early.

Account Monitoring Tips
1. Weekly Checks: Review your financial accounts at least once a week for any unusual activity.
2. Prompt Investigation: If you identify any unidentified charges, investigate and address them promptly to prevent further issues.

Get Familiar with Common Scams

Understanding prevalent scams in South Africa is crucial for staying ahead of fraudsters.

Top Scams in South Africa

The Banking Commission reports that common scams in 2023 include impersonation of institutions like banks, fake sweepstakes, and fraudulent job postings. Being aware of the hallmarks of scams is vital.

Common Scams in South Africa
1. Impersonation of Institutions: Scammers may pose as banks or other trusted entities to gain your trust.
2. Fake Sweepstakes: Beware of unsolicited messages claiming you’ve won a prize, especially if you didn’t enter any competition.
3. Fraudulent Job Postings: Exercise caution when applying for jobs online and verify the legitimacy of the posting and company.

Be Skeptical of Unusual Requests

Scammers often rely on creating a sense of urgency to manipulate individuals into providing money or personal information.

Recognizing Red Flags

Sizwe Mdlalose, a cyber security specialist, warns that scammers may employ various tactics, including fake tech support windows. South Africans need to be particularly cautious about unsolicited communications, especially those urging immediate action.

Warning Signs of Scams
1. Urgency: Scammers create a sense of urgency to pressure individuals into quick decision-making.
2. Unusual Requests: Be skeptical of unexpected requests for money, gift cards, or personal information.
3. Tech Support Scams: Fake tech support windows can lead to unauthorized access to personal information.

Educate Yourself About Scam Tactics

Staying informed about evolving scam techniques is crucial for maintaining financial security.

Tech-Savvy Scammers

In a recent incident in the Johannesburg, Gauteng. area, a fake tech support window appeared on a computer, leading to criminals persuading an individual to send gift cards and cashier’s checks. Understanding how scammers operate is essential to prevent falling victim.

Tech-Savvy Scam Tactics
1. Remote Management Tools: Scammers may install remote management tools to gain access to your files and extort you.
2. Social Engineering: Scammers use persuasive tactics to manipulate individuals into providing sensitive information or funds.

Act Promptly to Address Suspicious Activity

If you suspect a scam or unauthorized access to your accounts, taking immediate action is crucial.

Emergency Steps

Contact your financial institution, change passwords, and report the incident to relevant authorities if necessary. Timely intervention can prevent further financial loss.

Immediate Actions
1. Contact Financial Institution: Report suspicious activity to your bank or financial institution.
2. Change Passwords: Immediately change passwords for affected accounts.
3. Report to Authorities: If the scam involves criminal activity, report it to the relevant authorities.

Staying safe from financial scams in South Africa requires a combination of awareness, scepticism, and proactive measures. By incorporating these strategies into your financial practices, you can reduce the risk of falling victim to scams and protect your hard-earned money. Remember, being informed and cautious are your best defences against financial fraud.

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Lethabo Ntsoane

Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips. He can be contacted: Email: lethabo@rateweb.co.za Twitter: @NtsoaneLethabo