SA consumers are soft targets as identity fraud rises
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The risks for consumers of financial and identity fraud are growing by the day, and indications are that workfrom-home practices during the pandemic have contributed substantially to the dangers. This is the finding of the Southern African Fraud Prevention Service (SAFPS) in its report on 2020 fraud statistics.
“We are really reaching a critical point when it comes to the economy and the extreme measures that criminals will use to perpetrate fraud,” says Manie van Schalkwyk, the chief executive of the SAFPS. “The 2020 statistics, which we collected, indicate that there are significant increases in key areas and that there is a long road ahead to address this challenge.”
Van Schalkwyk says fraud increased by 161% in the Eastern Cape and by 120% in Gauteng. “There were increases in every province, with the exception of Limpopo,” he says.
Fraud listings increased by 62% and victim listings were up by 54%.
“Last year was a year of major disruption, as many employees had to work from home. The problem with this is that employees are now conducting their work, and in some cases sending sensitive information, across servers that do not have the same level of security as the servers at their normal place of business.
“Cybercriminals are conducting targeted attacks on servers to steal valuable data and use it to commit fraud. We saw this in the Experian and Absa data breaches last year. The fact that there is a significant increase in victim listings could be because of an increase in data breaches,” Van Schalkwyk says.
Perhaps the most worrying statistic coming out of the SAFPS report is that impersonation fraud – otherwise known as identity fraud – has increased by an alarming 337%.
“Impersonation fraud is the act of a criminal impersonating another person by stealing their identity and then opening accounts in their name. The fraudster has the details of the victim and tries to take over an account. The credit provider will ask the questions normally asked to the account holder. Because of data breaches, this information is available to the fraudster, making it easier to take over the account. They then take over the account and leave the victim with massive amounts of debt,” says Van Schalkwyk.
He adds that technology has improved significantly, so it has become easy to make a fake application look legitimate.
COMPANY AND CONSUMER PROTECTION
The SAFPS reports that industry savings by companies that use the SAFPS shared fraud database increased by 86% to R4.4 billion.
Van Schalkwyk urges companies that are not members of SAFPS to visit its website to find out more about how they can become members and benefit from the database.
For the consumer, at the core of the SAFPS’S service offering is protective registration. This is a free service that protects you against identity fraud – either as a prevention measure or if you believe your personal information has been compromised. When you apply for protective registration, the SAFPS alerts its members to take additional care when dealing with your personal details. In the case of compromised information, the SAFPS will issue you with a “victim of impersonation” letter that you can share with credit providers to assist in any verification processes.
“Visit our website on www.safps. org.za Click on the fraud prevention tab and protect yourself against identity theft with protective registration. For the best results, use your smartphone. Once you have uploaded key pieces of information, you will add another layer of protection against potential identity fraud,” says Van Schalkwyk.
He says the financial risk landscape will most likely worsen further before measures can be put in place to address the challenges the pandemic has fostered. Improvements will occur as SA comes to terms with the continued disruption that the pandemic is having on the country and as we adjust to new ways of doing business.
“Where does this leave companies and the consumer? We need to be proactive when it comes to managing our identities and the opportunities that are presented to fraudsters. It is imperative that consumers, and companies, protect themselves against fraud, and more and more we see the use of biometric data as the solution for the future,” Van Schalkwyk says.