Home Uncategorized Avoiding the Con: Common Types of Fraud to Watch Out For

Avoiding the Con: Common Types of Fraud to Watch Out For

by Admin

One of the best things about living in our current age, is convenience. We can order gadgets, food, books and practically anything online, and have it delivered to our door. We can even have a digital stokvel, accessible via phone, email or social media.

Of course, with every pro there is a con, and online criminals know the con best. Our convenient online lifestyles leave us vulnerable to hackers, scammers, and everyday chance takers, when we are not careful with our online safety.

United African Stokvel takes the security of its members seriously, and we hope to help you see the con before it’s too late. Here are common types of fraud you should watch out for:

Phishing for Personal Information

Scammers know our most vulnerable element is our personal information. We spend a significant amount of time updating profiles, changing passwords, and/or using our credit/cheque cards for online purchases. This means a lot of our personal data is stored somewhere online.

Thankfully, most companies have security on their websites keep that data safe. So, how do hackers and scammers get this information? Most of the time… directly from us, through a method known as spoofing or phishing.

How Does It Work

Phishing is a method of getting a user’s personal information via email, or by sending them to a false version of a website they regularly visit. The “trick” of the scam, is convincing the user that the email is legit, comes directly from a reputable company or bank, and the user needs to update their personal information “for security reasons”.

The scam works because phishing emails and websites look official – they can look like your banking website. All of this is a front to trick you into giving your personal details.

How To Prevent It

Check the email address and domain name: Companies have their own domain names and can be used to verify where the email came from. Apple will not send your bill from a Gmail account, for instance.

Don’t Click That Link: Your bank, social media site, online store, etc. have a specific URL/address for their official website. If you don’t trust the email, don’t click on any links. Rather go to the website directly by typing in their URL.

Pay In Advance

Next on the scammers arsenal is the “pay first upfront, receive promise later” approach. There are many ways that scammers can use this approach to get your personal information or your money, only to find out that the company doesn’t exist.

The most common version of the scam is the “Nigerian Prince” scam, offering large portions of inheritance for transferring money across countries. The most recent version of this scam, in South Africa, came in the form of the WhatsApp Stokvel.

How Does It Work

Most of the time these scammers aren’t looking for specific people, instead, they send out mass emails or SMSes, hoping to catch someone. Once they have a “victim”, they squeeze out as much as they can from them, asking for cover fees, advanced payment to release goods or added taxes for international fees.

The WhatsApp Stokvel scandal of 2019 asked people to pay a joining fee of R200 and R1000 is paid when you bring two new recruits. Sadly, no such money was paid and members lost their joining fee.

How To Prevent It

Verify Everything: It’s easy to get caught up in the hype of making money quickly. The best practice is to research the company, see if they exist, check their ratings and credibility, their offerings, etc.

Be Cautious: Most of us know that emails about inheritances and Nigerian princes are scams. For everything else, ask yourself if it’s too good to be true, talk to others who may have received the same email/SMS, and triple check everything before you hand out money or information.

Online Shopping/Classifieds Scams

The ease and convenience of online shopping gives us great benefits, such as avoiding the mall completely, a wider product range than an average store, and delivery.

At the same time, online shopping is also the best place for scammers to “shop” for new victims. If a website doesn’t have proper security, your details can be stolen. If you’re buying from a person and not a site like Takealot or BidorBuy, they could send you the wrong items purposefully and disappear with your money.

How Does It Work

Common online stores use secure encryption or a verified secure system when you pay via credit/cheque card. Scammers will try to use phishing to get this information from you.

Online sellers that are actually people, are far more difficult to work around. They use trust and fake reviews to convince you they are legit, or the product they are selling is real. There have been cases where a faulty or inferior product was given instead, or personal details stolen and used for false purchases.

How to Prevent It

Check Site Security:  When it comes to online store security, make sure that the site uses an encrypted connection for your purchase. In the address bar, showing the site address, check to see that it is HTTPS:// and not HTTP://.

Double Security: Add Two-Step verification or have an OTP sent to you phone/email with every purchase, to make sure the purchase was done by you.

Your Information, Your Responsibility

Take control of your information and only give it to people and companies you trust. Before making online purchases, find out all you can about the company, the person, and any terms and conditions you must consider.

Read and research as much as you can: An informed decision is a wise decision, after all.

United African Stokvel has a constitution you can read, providing all the legal information you need. You can also call our consultants about any issues or concerns you have, and we’ll be sure to get back to you as soon as possible.

United African Stokvel is always looking for ways to help our members. This blog is intended to help our members think about their finances in a different way. This information is not intended to be a substitute for a financial advisor, you should consult with a financial advisor before relying on this information.

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