SA records spike in online impersonations: Why enterprises need to protect their customers

by Aug 29, 2022

The Southern African Fraud Prevention Service (SAFPS) recently detected a spike in online impersonations and fraud. These cyber crimes are largely perpetrated through phishing and compromised databases, where personal information is stored by large enterprises. Big companies have a responsibility to protect their customers’ information and data.

4C Group of Companies offers various support services for databases, hardware, operating systems and business applications. These include fraud prevention through our Business Assurance services. Our iNSight software delivers effective fraud management and helps to minimise the potential revenue lost through scams, impersonations and money laundering.

iNSight’s Fraud Management System monitors enterprise data to identify any potential fraudulent activities. When possible fraud scenarios are detected, multiple in-stream alarms are triggered. Fraud cases can be automatically created within the software, which allows analysts and investigators to get a centralised view of each case.

Impersonations on the rise in South Africa

According to SAFPS, cases of online impersonation and fraud have spiked by 264% in the first half of 2022, compared to the same period in 2021. “This is particularly concerning given the economic climate that we are currently facing,” explains SAFPS CEO, Manie van Schalkwyk.

“Consumers are facing a significant cycle of high inflation and are looking for ways to make ends meet. This makes them increasingly vulnerable to scams and schemes, which are being carried out by highly-motivated, highly-skilled fraud syndicates,” he adds.

Some of the country’s biggest corporations have been targeted by cyber criminals this year, including Dis-Chem, TransUnion and Experian. This has exposed the personal data of millions of South Africans and has led to hundreds of millions of rands being lost to ransoms and lost revenue.

Not only are these attacks potentially threatening to ordinary citizens, but they also lead to compromised business data that can impact an entire supply chain. “The various data breaches have all highlighted the vulnerability of personal information and how easily accessible they are to the motivated criminal,” states van Schalkwyk.

More insights from SAFPS

The statistics released by SAFPS show that Gauteng is the hub of fraud incidents in South Africa, with 62% of the country’s total recorded cases. This is unsurprising as Gauteng is the financial powerhouse of the country, with many multinational organisations and global enterprises setting up head offices in Johannesburg. 

KwaZulu-Natal accounted for 18% of the fraud incidents in the first half of 2022 – a 102% increase from the same period in 2021 for the province. While the Western Cape only accounted for 8% of the total fraud cases, this is a 133% increase from 2021, making it one of the biggest jumps in the country.

SAFPS has also found that money mule fraud, or the misuse of retail banking accounts through fraudulent activities, has increased by 97% so far this year. “Money muling is a significant global risk. Reports from Cifas in the UK point out that money muling funds illegal activity such as money laundering, terrorism and human trafficking. Obviously, this is concerning, particularly within the South African context,” highlights van Schalkwyk.

This spike in cyber crime means that enterprises need to ensure that they protect their data and improve their cyber security for databases, networks and IT systems. The Protection of Personal Information (POPI) Act stipulates that businesses have a responsibility to safeguard the personal data of their customers and business affiliates. Failure to do so may result in hefty fines and imprisonment in the most extreme cases, not to mention reputational damage.

Cyber security is a key determinant of business success, especially in the digital era. It not only provides a defensive position, but also a measurable return on investment through improved productivity, regulatory compliance, business continuity, viability and brand credibility.

4C Cyber Defence is the expert cyber security business unit of 4C Group. We provide specialised consultation and world-class managed security services to banks, telcos, financial services providers and other enterprise clients in Africa. For more information about our fraud management solutions, please contact us today.

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At 4C Group of Companies, we strive to effect operational changes and cost savings for customers through our iNSight product and associated services. This product’s main function is to re-purpose and deliver business-critical information to a variety of systems and stakeholders. 

We specialise in information assurance, business assurance, FinTech solutions and a variety of business systems. For more insights into our products and services, check out our blog page or follow us on Facebook and LinkedIn.

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