10 CONSUMER FRAUD TRENDS TO BE AWARE OF

The effects of COVID-19 may have done wonders for digital commerce and remittances, but the mass move to digital channels also opened doors for scammers to take advantage of unwary people and commit consumer fraud.

Most online shoppers have increasingly become comfortable shopping and transacting online; often extending online shopping from just necessities like groceries, take-aways or a weekend away, to ordering medicine, sending money to family or friends in need, donating money to charity, or booking a holiday package from the comfort of their homes.

Since fraudsters take advantage of every opportunity, they are exploiting this new-found digital confidence among consumers.

Common fraud themes

If you find yourself in a situation that you think could potentially be a scam, there are two important themes to keep in mind to help you decipher if you're dealing with consumer fraud:

• A fraudster will offer something, usually something that is too good to be true; or
• A fraudster will request something and wrap it in a fake urgent scenario that encourages you to act quickly.

Mark Mwongela Ngungi, Sales Development Director Africa at PayPal shares some of the common consumer fraud trends to be aware of as you transact and interact online:

1. Identity and data theft

An increasingly common scam involves a direct message, mail or phone call in which fraudsters pretend to be from your bank or mobile service provider. They may pretend to work in the entity's fraud department, have convincing personal details about you, and will urge you to give them your bank card or mobile account PIN to help them prevent fraudulent activity on your account. Once you have shared your PIN and other details, they can then deplete your account. Never share personal account details or PINs with anyone via mail, messaging or in a phone call.

2. Fake payment / Deposit & refund scams

Many small online merchants, and even individuals, have fallen victim to scams whereby fraudsters send a fake proof of payment to them, claim they have accidentally sent them money or overpaid, and ask for the funds to be returned. The victim sends the fraudster money, only to discover later that no deposit was ever made into their account. The same goes for a fake proof of payment email or payment text for goods; and sellers dispatch the goods only to discover no payment has been made. Always double-check that such funds are indeed in your account.

3. Invoice fraud scheme

A fraudster may take advantage of these uncertain times by posing as a reputable foundation or corporate brand to request funds or donations with a fraudulent invoice. If you receive an invoice, from a well-known corporation or non-profit organisation, that you did not request, always be vigilant and protect yourself when clicking on links, opening attachments, or receiving false requests for funds. Any invoice sent to you should be reviewed to ensure that it is a legitimate invoice and one that you agreed to pay prior to receipt of the invoice.

4. Cybersecurity

Online shoppers are often at risk during the payment process, without even knowing it. To process online shopping transactions, several devices communicate your personal and credit card details to process the transaction. Some online shopping platforms may expose user information, and once the payment has taken place, such information can be accessed by criminals. Use trusted payment platforms that you know keep customer details secure throughout the entire transaction.

5. Online merchant fraud 

Even the smallest merchants and individuals can now offer goods for sale online and through social media. While this empowers sellers and brings convenience to buyers, it also means that scammers can proliferate online, accepting payment for goods they never deliver. Before making purchases from any online merchant, be sure to do research into the merchant by looking for reviews and checking to make sure you're shopping with a reputable seller. Offers that seem 'too good to be true' usually are. Be wary of private sellers who insist on a 'holding deposit' for goods you have not inspected yet.

6. Fake debt scam

A fraudster might contact you representing him or herself as a debt collector or court official, telling you that you must pay money that you don't actually owe. Do not click links to authorise immediate payment. Before taking any action, do some research into the claim by verifying the real numbers for the government agency, office, or employee, and do not agree to wire money in order to pay back the debt.

7. Employment scams

With more job seekers moving online to look for opportunities, they have become an easy target for employment scammers. In these scams, fraudsters might try to trick victims into paying for an employment opportunity that "guarantees" a job or an opportunity for the victim to make money.  In most cases, these offers are not legitimate. Few - if any - companies charge job applicants. Check the alleged employer's website and social media pages or call their HR department to determine whether they really have vacancies before trusting an agent.

8. Romance scams

These scams have made top news and even documentaries lately, as fraudsters create a fake digital persona to target people seeking romance online, build a relationship with them, then trick them into sending money. Because victims believe the scammer to be their 'romantic partner', many have been successfully defrauded of huge sums of money.  Be cautious about sending money to anyone you have not met in person, particularly if the request is made with a sense of urgency.

9. Charity scams

A fraudster may contact you asking for a donation to charity, often following an emergency or disaster situation such as the floods in KZN or the war in Ukraine. Before donating, make sure you do some research into the charity, checking ratings and understanding how much of your donation will go to the cause you want to support.

10.  False emergency scams

Severe illness can make people and their families desperate for a cure, and thus susceptible to scammers promising to help. Fraudsters take advantage of people's insecurities about their appearance, or their concerns about a serious health condition. Be cautious of 'cures' and 'miracles' sold online and via social media. Similarly, fraudsters may pose as a relative or a friend and ask you via email or instant messaging to send money immediately to help with an emergency. Such requests are usually dramatic and often requested to be kept a secret. Before responding, take steps to verify the identity of the person asking for money, such as phoning them directly, reaching out to another family member or friend who can verify the emergency, or asking them questions that a stranger would not be able to answer.

Resources for fraud reporting

If you believe your account with PayPal has been affected by fraud you can report the incident to PayPal through the Resolution Center where you can open a dispute. If you believe a scammer has targeted your bank account or mobile account, contact your bank or telco's fraud hotline immediately to report the incident.

For any fraud you experience online, report the incident to your local police department, the South African Fraud Prevention Service (SAFPS) or log a query with the national Cybersecurity Hub.

This article first appeared on http://www.bizmag.co.za