News & Views

SA worry about identity theft
 

As more payments are made online, new research (www.fico.com/en/latest-thinking/ebook/fico-consumer-fraud-survey-2021-south-africa) from FICO (www.fico.com) suggests that South Africans are concerned about fraudsters using their information to hijack their financial personas.

When asked about what fraud practices concern them the most, 36% say they are most concerned about fraudsters stealing their identities and using them to open financial accounts, while 28% of South Africans were worried about fraudsters using the information to take over their accounts.  Notably, 17% of those surveyed had already been victims of account fraud.

South Africa has experienced a spate of fraud crimes, with the Global Consumer Pulse Study reporting that 37% of South African consumers have recently been targets of Covid-19 related digital fraud.  TransUnion reported that the percentage of suspected fraudulent digital transaction attempts against businesses that originated from South Africa increased by 44% from March 2019 to March 2021.

“Criminals found new ways of committing crimes as the pandemic started spreading worldwide.  The changes in human behaviour, particularly the switch to more digital methods to manage relationships and finances, created opportunities for more fraudulent activities,” says Michelle Beetar, Vice President and Managing Director for EMEA, FICO.

“One concerning finding is that only 8% of respondents said the type of fraud they were most worried about was a fraudster tricking them into sending a payment, even though this kind of scam is growing fast and is a major focus for banks.  Consumers should understand that it is incredibly easy to be fooled by these scams, which may appear to come from trusted sources such as their bank or a courier delivery service.”

Over 30% of respondents say that they did not feel their bank had enough security checks in place to protect online payments and more security checks are needed.  According to the report, the greatest irritation to consumers is having to circle through different banking security authentication methods with some 14% of respondents saying that messages about a fraud decline take forever to get to them, and a similar number said that having their cards blocked for legitimate purchases is an affront from the banks.


One of the most negative transactional experiences reported was having a card purchase declined at the till, with nearly half (49%) of respondents saying they see this as a negative experience. Nearly 39% of South Africans said that they would consider changing banks if a card transaction is falsely declined up to three times when doing an online transaction or in-store.

“There is a pressing need for banks to find the right balance between security checks and consumer education,” concludes Beetar.  “To prevent customers feeling overwhelmed and annoyed by security measures, banks should use their customer communications channels to good effect so that they improve rather than detract from customer experience.  They can also ‘invisibly’ check payment transactions, AI and machine learning tools that look at transaction data to identify the signals of fraud are an accurate way to detect and prevent fraud without impacting customer experience.”