A totally wrong assumption is costing many South Africans dearly — to the point of financial ruin in some cases. It’s this: if a person calls them, claims to be from their bank’s fraud division, alerts them to potentially fraudulent transactions on their account, and shares information about their accounts and spending habits, they must be who they say they are.
How else would they know, right? And with that reassurance, and being anxious about the imminent fraud, they let the caller lead them to divulge numbers that give them access to their bank accounts.
Here’s how those callers know: thanks to a number of huge data breaches — think TransUnion and Experian — our personal information is “out there” on the dark web, and in the hands of fraudsters. They know our ID numbers, our accounts and their numbers, and they can confidently say things such as: “I see you don’t use your credit card much...”
That’s the line which had a friend of mine fall for the scam just a few days ago, because it was true. And the fraudster then left her with a huge credit card debt. But what the fraudsters don’t have are our log-ins, or the one-time-pins and other forms of authentification only we can provide to make purchases or create new beneficiaries. So they make those “vishing” calls to trick us into reading those crucial numbers out to them.
By falling for their deceit, and following their instructions, we “hand them the keys to our safe”, as the banks term it. And the banks generally don’t take liability for any of their clients’ losses — not unless they failed to take appropriate action to block the accounts.
Any fraudulent transaction that whisks money out of a client’s bank account from the second after they make the call to their bank, becomes the bank’s liability. That’s the stance of the banking division of the National Financial Ombudsman Scheme. That’s why it’s crucial to make that call to your bank’s fraud department — save that number in your phone right now, please — as soon as possible.
Sadly, such quick action didn’t help a Cape Town woman. One evening in early May, Mercedes, who’s in her mid-50s, got a call from a person claiming to be from “FNB’s fraud department”, saying her account had been compromised. “They knew my details and asked me to verify them with some security questions,” she said.
Her answers, of course, gave the fraudster access to her accounts. “After a few minutes of speaking to this very persistent and aggressive person, I realised something was wrong and ended the call.”
She called her bank, requesting that all her accounts be blocked. “At that time, I received SMSs showing that three amounts were being processed on my credit card,” she said. “R150,000, R54,000 and R16,000. They showed as being ‘reserved’.”
If you get a call from someone claiming to be from your bank’s fraud department, cut them off and then call your bank on the number you have saved, in case it was a genuine call
But those transactions did go through on Mercedes’ credit card, and she now has to pay off that R220,000 debt with R18,000 interest a month. “I don’t have the income to pay off this fraudulent debt,” she told me.
FNB was able to stop the fraudulent personal bank loan application and revolving credit accounts set up by the fraudsters. I asked the bank why those three hefty credit card payments “went through” despite Mercedes’ prompt request to block her account, and why it refused to take responsibility for her loss, despite the ombud’s stance.
Senzo Nsibande, CEO of FNB Card, said the bank’s fraud controls declined the first transaction attempt and created an alert which was sent to Mercedes and acknowledged as legitimate activity. “The subsequent three transactions were all separately authenticated thereafter via 3D Secure notifications.”
Here’s something we need to know about that term “reserved funds”. “The Payment Scheme Rules, which manage payments, refer to reserved funds when a purchase has already been made,” Nsibande said.
“Reserved funds are committed, as the approval to transact has been given, and the agreement to pay then stands. These funds cannot be clawed back once the exchange has been authorised, outside of scheme rules. A payment of 10% of the claim value was offered by the bank to this customer as partial goodwill for losses incurred. However, FNB is not liable for the approved transactions.”
I can’t say this enough: if you get a call from someone claiming to be from your bank’s fraud department, cut them off and then call your bank on the number you have saved in your phone’s contacts list, in case it was a genuine call. Spread the word, please! Oh, and when my friend posted on Facebook about having fallen for this scam, about half of the scores of responses she got were recommendations from strangers to seek help from cyber experts who would get her money back, she was assured. Something else to avoid!
• After 10 years of writing this column for Arena Holdings titles, I’m leaving to take on a new challenge. Farewell readers; thanks for all your feedback and for sharing your stories with me. Be careful out there.
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