Johannesburg - As we head into the festive season South Africans are again reminded to exercise caution when it comes to their online activities.
Online fraud is a growing threat that is facing businesses and consumers and the increase in online fraud means more organisations and individuals are exposed to cybercrime.
Business analyst at LAWtrust, Riaan de Villiers, said the Covid-19 pandemic, which has led to more organisations transitioning to work remotely, has magnified online fraud.
Following TransUnion’s latest quarterly analysis centred on global online fraud trends, the rate of fraudulent digital transaction attempts against South African businesses increased by 43.62% between March 2019 and March 2021.
“While the use of various online services simplifies consumers' daily business functions, one must exercise caution to guard against online fraud attempts. Awareness is essential to ensure the protection of data against cybercriminals,” said De Villiers.
The experts warn that cybercriminals will be on the lookout for online shoppers as the Christmas shopping season reaches its peak. In a report by the Centre for Internet Security, more than 590 million people worldwide are affected by cybercrime each year.
In a recent study conducted by TransUnion, Financial Hardship, 41% of South African consumers reported being victims of digital fraud related to Covid-19. The findings also revealed that the number of suspected fraud cases coming from South Africa increased by 6.59% at the start of the 2020 holiday shopping season.
Asked why banks do not offer more protection against cybercriminals, De Villiers said banks have to tread a fine line between security and usability.
“Clients are constantly demanding that banking must be easier. On the other hand, they demand that banking must be safer. However, adding extra security reduces usability. Extra security also adds to the cost of banking. Issuing crypto tokens to each customer makes banking safer but it adds to the costs and admin. Tokens get lost, digital certificates on the token expire, passwords are forgotten – this creates admin headaches for the bank and customers,” he said.
Ombudsman for Banking Services, Reana Steyn, said they do not hold the view that South African banks are unsafe in fact, the country’s banking system is both modern and highly sophisticated, even when compared to banking systems of developed countries.
“Our banks offer secure and convenient payment platforms utilising various means, including pins and passwords, to protect access to customers’ banking profiles,” she said.
“Banks also promote security through continuous education and awareness programmes directed at their customers. We have found no evidence to suggest that the fraud took place as a result of fraudsters gaining access to the banks’ systems. In fact, our findings point to the fact that, due to the difficulty to penetrate the banks’ security systems, fraudsters instead target bank customers and convince them into giving away their confidential information.”
Steyn said bank customers play a crucial role in ensuring that money stored in their bank accounts is safe and their importance within the banks’ security chain cannot be underplayed.
“Unfortunately, more often than not, the weak link in the security chain has been bank customers who, in many of the matters investigated by the Ombudsman for Banking Services, confirmed to have compromised their confidential access banking details to the fraudsters – especially in phishing fraud cases, where the customers are duped into believing that they are sharing their details with legitimate bank employees,” she added.
The South African Insurance Association (Saia) also called for consumers to exercise extreme caution while shopping online over the period leading to and after the festive season.
General manager of insurance risks at Saia, Pamela Ramagaga, appealed for consumers to beware of fake sites, which look like authentic companies, false deals with massive discounts or promotions, or even fake calls claiming to be from their bank.
“Criminals have also targeted those working from home where company IT security protection is not in place, leaving staff and companies exposed. The most common methods used were phishing, ransomware, spam, and cyberbullying. Lately, cybercriminals have infiltrated WhatsApp numbers and are scamming unsuspecting individuals through the messaging app,” she said.
Ramagaga stressed that the holiday period is a goldmine for cybercriminals, who see multiple opportunities to catch unaware shoppers and are ready to exploit blind spots during the festive season.