Don't fall prey to festive season scams: The price of keeping your money safe is constant vigilance

NOVEMBER 21, 2016

It’s the time of year when things are winding down, people are relaxing in anticipation of the festive break and scammers are getting busy.

Alet Griesel, chief risk officer at DirectAxis, says the financial services company typically receives more reports about scams and fraud attempts towards the end of the year.

It’s not clear whether this is because criminals believe people let their guard down ahead of the summer holidays, they have more money in their bank accounts because they’ve been paid year-end bonuses or are just more in need of money ahead of Christmas.

Whatever the reason, or combination of factors, she says, while you should always be vigilant about sharing your personal information, it’s wise to be extra cautious as the festive season approaches.

Here are DirectAxis’ five tips for avoiding common scams.

  1.     Never click on a link in an e-mail or SMS

One of the ways scammers try to obtain your personal information is to send an e-mail or an SMS which seems to come from a bank or financial services company or even SARS alerting you to a payment, refund or asking you to confirm your details.

When you click on the link it takes you to a site that looks genuine, but is actually a fraudulent site. As soon as you enter your account details and pin number, the fraudsters can access your account. No responsible financial institution should ever send you a link to a bank account log-on page in an e-mail or SMS.

  1.     Never pay an upfront fee to secure a loan

Another way criminals try to get their hands on your money is by pretending to be a legitimate financial services company. The way this scam typically works is you receive an e-mail informing you that you’ve qualified for a low-interest loan. It says that to secure the loan you need to pay an upfront fee for administrative, legal or other costs. The offer is often for a limited time, to try and pressurise you into making the payment. Of course, if you pay, the thieves take your money and you never receive the loan.

“Just because an e-mail has a company logo, registration number and address on it, doesn’t mean it’s genuine,” says Alet. “If you’re made an offer with an unbelievably low interest rate, don’t believe it.”

  1.     Guard your personal details

Not all scammers are out to get your money. Some just want to get enough of your personal information, such as ID number, address and date of birth to open a fraudulent store or loan account. These scams work because the request for information usually seems reasonable, such as a financial institution, retailer or online shop asking you to confirm some information.

Criminals are also increasingly targeting loyalty programmes, such as those that airlines, banks and many retailers offer. It is thought they’re doing this because people don’t see rewards points as real money and are consequently less security conscious.

  1.     If it sounds too good to be true, it’s a con

The best-known scams are used over-and-over again, because they still catch plenty of people, no matter how often they are warned.

The most common of these is the lottery scam where you’re told you’ve won a lottery and have to provide information such as your banking details to claim the prize. You might also be asked to pay a fee for administration costs.

Variations include the inheritance scam, which works along the same lines or the hard-luck story, where a wealthy businessman or politician claims to need your help to transfer a large sum of money.

The scammers assume that greed will overcome reason and that the anticipation of being rich will make people push aside any doubts about whether the request is authentic.

  1.     Don’t be tempted by unfamiliar websites

Criminals know that with Christmas coming people will be looking for presents at great prices, so can set up fraudulent websites to try and con people out of their money. Although this scam is more common overseas than in South Africa, you can be sure it will increasingly start happening here too.

If you are shopping online, applying for a loan or doing any other transaction which involves providing your personal or banking details, stick with known brands. Always type the brand name into your browser rather than follow a link in an e-mail.

Alet’s final tip is that if you do think someone’s tried to scam you, report it, even if you have no intention of responding.

Most reputable financial institutions and retailers have fraud departments and will act to shut down websites and bank accounts used to try and defraud their customers. 

Finally bear in mind that although these are the most typical scams, criminals are constantly trying to find new ways to separate you from your hard-earned cash. You need to be constantly vigilant and if you’re not confident an offer or request is genuine, always check first. For an infographic how to spot common scams visit www.directaxis.co.za