Consumers are urged to be on high alert as the rate of advanced fee scams, also known as 419 scams, are on the rise, often targeting the most vulnerable members of society. Recent research by Columinate found that fraud was at an all-time high with almost a quarter of digital banking users falling victim to scams, the most prevalent of which were advanced fee loans, pre-qualified loans or credit card scams. Despite their prevalence, many people are still unaware of the risks these scams pose and, as our economy shrinks and unemployment surges, desperation makes people easy targets.
The South African Fraud Prevention Services (SAFPS), a not-for-profit organisation, specialising in fraud prevention, receives hundreds of calls from the victims of advanced fee scams, many who have lost large sums of money and are desperate for help.
Manie van Schalkwyk, CEO of SAFPS, explains, “Once a consumer has handed their money over to these criminals, there is really nothing we can do, which is why it’s so important that consumers know how to identify and avoid scams before they become victims.”
Tragically these scams seem to target people who already have money problems or impaired credit ratings, drawing them in with the promise of large sums of cash in exchange for a relatively small upfront fee.
According to van Schalkwyk , these fraudsters are at best after your money but many also try to get as much of your personal information as possible. “Once they have this information, they will take over your identity, open new credit accounts in your name or take over your existing accounts, spending your money and leaving you with the bill,” he warns.
While advanced fee or 419 scams can take many forms, scammers often pose as well-known lenders or credit providers promising generous loans with extremely low interest rates, even to blacklisted consumers. Under the National Credit Act, no credit provider is allowed to ask for upfront fees, so these scams should be easy to spot. Despite this, lenders have had an influx of complaints from people who claim to have paid ‘legal, administration, banking or insurance’ fees to secure a loan and then never receiving any money in return.
“We have definitely noted a rise in advanced fee scams. Unfortunately, once a frauster has your money, there is very little recourse other than reporting the crime to the South African Police Services for investigation. However, these criminals are notoriously hard to track, making it unlikely that victims will ever get their money back,” says Craig Johnson, Wonga’s Fraud Specialist.
Wonga believes that, when it comes to scams, prevention is easier than cure, stressing the need to educate consumers. As such, they have produced a digital leaflet, in partnership with the SAFPS, that is freely available for download on their website at www.wonga.co.za/dont-be-a-scam-victim.
“We encourage people and organisations to download the leaflet and use it for their own purposes, to help spread the word and encourage people to be #ScamWise,” says Johnson.
If you believe you are a victim of identity theft, or your identity has been compromised in any way, contact the SAFPS to get additional protection. Their services are free to the public. SMS the word “ProtectID” to 43366 and they will make contact with you.