Subscribe

Banking website cloning scams on the rise in SA

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 03 Apr 2024
Cyber criminals stole over R740 million from unsuspecting users through digital banking fraud in 2022.
Cyber criminals stole over R740 million from unsuspecting users through digital banking fraud in 2022.

South African banks and financial services providers are increasingly being targeted by criminals, as website cloning scams proliferate as a method to steal consumers’ hard-earned cash.

This emerged during a recent webinar hosted by the Financial Planning Institute of Southern Africa, in collaboration with the South African Banking Risk Information Centre (Sabric) and the Financial Sector Conduct Authority (FSCA).

Panellists Lyndwill Clarke, head of the consumer education department at FSCA, and Ntshiki Maluleka, digital banking crime manager at Sabric, highlighted how cyber crime in SA has increased exponentially over the past few years. The economic downturn and high unemployment levels are among the factors contributing to more vulnerable people becoming victims.

As more locals take to online banking channels for their everyday transactions and purchases, scams are becoming more sophisticated, with old and young digitally-savvy consumers increasingly falling prey to an array of tricks, they pointed out.

According to Clarke, while website cloning is not a new scam, it is increasingly gaining momentum in SA, as a phishing method to deceive unsuspecting victims into giving personal information through a website replicating the legitimate website.

“Recently we’ve put out a lot of warning messages about financial service providers that pretend to be legal when they are not. What criminals do is, for instance, create a Sanlam, Capitec or Old Mutual website that looks exactly like the legitimate one,” explained Clarke.

“Unwittingly, customers go and click on that website and see an investment opportunity which they might be interested in. If you analyse the site further, you realise the information is sketchy and there isn’t sufficient information describing the type of investment. Customers need only go through the first page. and on the second page, they are requested to input their banking details.”

No legitimate bank would ever ask for personal details via its website, but rather in-app or inside the bank branch, he noted.

According to Clarke, the FSCA receives complaints daily, from consumers who report they have lost a significant amount of funds due to a bogus financial services provider.

He referenced a case in February, where a woman lost R1 million through a Valentine’s Day scam.

“The big problem with falling for scams and fraudulent activities stems from lack of financial literacy – this is the missing link that results in people getting scammed. And it comes to a point where people don't know what they don't know. Financial service providers that are not registered often have a fraudulent document as proof of licensing, so customers must do their due diligence, ask the right questions and look for documentation from FSCA,” he advised.

A counterfeit South African Revenue Service website with spoofed links to the Absa and Standard Bank websites. (Source: Sabric)
A counterfeit South African Revenue Service website with spoofed links to the Absa and Standard Bank websites. (Source: Sabric)

Maluleka referenced the findings of Sabric’s Annual Crime Stats 2022 report, which revealed cyber criminals stole over R740 million from unsuspecting users through digital banking fraud in 2022.

He noted this was primarily attributed to the growing number of fraud cases related to banking applications and internet banking.

Maluleka said criminals are increasingly using clever tactics that go beyond sending e-mails, SMSes, instant messages and phone calls, to using malware or remote access to trick victims.

Maluleka showed an example of a counterfeit South African Revenue Service (SARS) website where tabs of the big four local banks are displayed. He demonstrated how, by clicking on one of the banking tabs, the consumer is easily re-directed to a cloned banking site, where they are asked to provide banking details.

“Here is a replica of a SARS website where they have included links of banks, and if you click on the spoofed link of the Absa and Standard Bank websites, the tell-tale sign is when we go to the address of the website, you realise it is definitely not real, but it is something that is purporting to be a Standard Bank website. These websites are designed in a way to harvest personal information and consumer banking information.”

Another tell-tale sign is when you don't see the padlock sign at the bottom of the website, which signifies that the site is safe, he continued.

According to Clarke, over the past year, several modus operandi have been on the rise, including smishing, vishing and phishing – which all involve enticing victims to divulge sensitive information. Other scams include travel scams, ATM-related fraud, investment fraud and job scams.

“People posing as providing employment opportunities online is on the rise. The moment you have to make a payment to receive something, it is often an indication of a red flag. You will notice that in the cases of job scams, criminals are often vague about the job description and they use Yahoo and Gmail e-mail addresses, which are not formal addresses from an employer,” he warned.

Share