When a supplier asks you to change their banking details, take care – it could be a scam. Always confirm changed banking details by email with a person you know at the organisation before making any payments. 

Call them on the number you normally use. The number on the email sent to you could be the fraudster’s.

How it works

Victim: “I’ve just been scammed and lost everything!”

Friend: “What happened?”

Victim: “I got an email from my biggest supplier saying their banking details have changed. The invoice also contained their new banking details. So I changed their banking details on my internet banking and made the payment, on time, as I always do. But after paying the invoice, I got a call from my supplier saying my account has not been paid and has been blocked.”

Friend: “Why, what happened?”

Victim: “Turns out it wasn’t my supplier who sent the email and invoice with new banking details, it was a fraudster. I paid the money into a fraudster’s account and now the money is gone!”

How fraudsters trick you into using fraudulent banking

  • Fraudsters hack the email account of a business, change the banking details on their invoices, and send these to all their debtors to make payments into their own account.
  • They intercept an email you’re meant to receive, change the banking details on the email or invoice, causing you to make the payment into a fraudster’s account.
  • They create fraudulent business letterheads or fax headers asking you to make future payments into their new account.

Tips

  1. If you receive banking details by email for a once-off payment, always confirm the banking details over the phone before making a payment.
  2. Beware of near identical email addresses. They may add a full stop, replace a letter or the email may end with .com instead of .co.za
  3. Hover over the email address to make sure the response email address is the same as the email address of the sender.
  4. Use bank-defined beneficiaries on your Online Banking profile.
  5. Check all documents for spelling mistakes, errors, and suspicious changes.
  6. As a business owner, you could protect yourself by not placing your banking details on your invoices but rather providing them over the phone.

These scams are creative. You’re promised a large sum of money but asked to make an upfront payment. You make the payment, and they either disappear with your money or get you to make more payments.

How it works

  • You’re buying something online, but then you’re asked to pay upfront or pay a deposit.
  • You’re asked to help with a business or financial transaction and promised large sums of money in return. But then you’re asked to cover some of the initial costs for the transaction. 
  • You get an email or SMS saying you’ve won a lottery or prize, or inherited money, and you need to contact someone to collect it. But then you’re asked to pay taxes or admin fees to release the prize or the money.  
  • You apply for a job and go for an interview. You ‘get the job’, but then you’re asked to pay for background checks or placement fees. When you arrive for your first day on the job, the company has no idea who you are.

Tips

  1. If it sounds too good to be true, it probably is.
  2. Never pay fees upfront unless you know it’s a reputable supplier. If buying online from a private individual, opt for payment on delivery or collection.
  3. Do not be fooled by fake emails or SMSs. Always check with the company to confirm it’s running a promotion or offering prizes. But do not use the number on the email or SMS, it could be the fraudster’s.
  4. Look out for spelling and grammar errors in SMSs and emails.
  5. Forward suspicious emails to the South African Police Services at 419scam@saps.org.za

In a deposit scam, the fraudster sends you a fake proof of payment for money that's allegedly paid into your account. You believe that the payment’s been made and release goods to them.

In a refund scam, you’re asked to return an ‘incorrect payment’ or ‘overpayment’. The scammer sends you a fake proof of payment to fool you into thinking payment was made.

Scammers often deposit a fraudulent cheque into your account to convince you payments have been made. The cheque bounces a few days later. 

Tips

  1. Never rely on a proof of payment alone. Always confirm a payment before you release goods or provide services.
  2. If you have accepted a cheque as payment, wait for the funds to be cleared before handing over any goods. Remember, bank-guaranteed cheques can also be forged.
  3. Use bank-defined beneficiaries.
  4. Look out for little errors on your proof of payment, or possible alterations, and spelling or grammar errors. These are often signs of fraud.

Many people date online, and there are success stories. But there are also cases of unsuspecting victims losing their life savings. 

Online scammers earn your trust by sharing lots of personal history and information with you. The reality is their profile details and pictures are fake and used repeatedly in scamming other victims.

How it works

  • They buy you an expensive gift. But then claim you need to pay import duties or taxes to receive it.
  • They have a business or family crisis. They ask you to help them out by sending some money, promising to pay you back.
  • They ask you to help pay for the travel costs to visit you. They even send you copies of fake travel documents to prove they’ve booked the trip. But they don't arrive, and you never hear from them again.
  • They propose to you online. But then they ask you to help set up your new home together by sending money. They either keep asking you for more money, or disappear.
  • When you don’t give them money, their pleas become more desperate and persistent.

Tips

  1. Be careful how much personal information you share on social networking sites. Scammers use this to target you.
  2. If you think you’re being targeted by a scammer, block them and report them to the online dating service immediately.
  3. If you arrange to see someone you met online, meet in a public place and bring a friend.
  4. Beware of people who keep promising to meet you but always cancel at the last minute.
  5. Watch out for people with extraordinary lives or jobs, who are always travelling to new places.
  6. Never send money to anyone you’ve only met online.
  7. Don’t give someone you’ve met online money to visit you.
  8. Look out for emails where words have been copied and pasted, or the letters are different fonts and sizes. Or when people say, ‘Hi, Beautiful’ instead of using your name. Scammers target lots of people at the same time with the same messages.
  9. When people you’ve met get in touch, check if what they’re saying relates to your last conversation. Syndicates use lots of people to run scams on online dating sites, so you could be chatting to 2 or 3 different people who are sending bulk messages.

Pyramid schemes are not always illegal. Suppliers of cosmetics or health products, for example, use pyramid structures to promote and sell their products. Because products are exchanged for money, these schemes are not illegal.

A pyramid scheme is illegal when it requires you to make a deposit of money only. This is in contravention to the Banks Act which has specific rules linked to the taking of deposits.

How it works

  • You’re offered really high returns and your returns increase with the number of people you recruit to the scheme.
  • You’re asked to make an initial start-up deposit as an investment into the scheme.
  • You’re asked to recruit others and will be offered bonuses for recruiting others.
  • The scheme has multiple levels of members all collecting commission on a single transaction.
  • The scheme isn’t authorised by or registered as a financial services provider.
  • If it sounds too good to be true, then it probably is.

A Ponzi scheme is always illegal. It’s operated by fraudsters who con you into investing your hard-earned money in a business venture or investment. You’re promised high returns in a short period of time.

This scheme uses the money of new investors to pay returns to older investors. Once recruitment slows down the scheme starts to collapse.

How it works

  • You’re promised abnormally high investment returns. Higher than what financial institutions can offer, like 30% or more.
  • You’re promised guaranteed returns. No return is ever guaranteed. All investments carry some risk.
  • You’re pressured into reinvesting your profits to pay other people’s returns.
  • You’re introduced to the scheme by friends or family who’ve already made some money. This is a ploy that works because you trust friends and family. Remember, the scammers need to recruit new members to pay interest to older members.

Like pyramid schemes, Ponzi schemes hide the true source of funds behind multiple transfers between different accounts.

Members’ bank accounts are used to channel funds so the scammers cannot be linked to the transactions.

Though you are not aware of it, you’re guilty of money laundering. Because as a member, you allowed your bank account to be used to channel these funds.

Understand what you’re investing in and beware of business models that are ‘too good to be true’. If you don't understand the business model, don’t invest. 

Only invest your money with credible FSB-registered institutions you have properly researched.