Capitec fraud warning

Capitec warned that scams are becoming more frequent and increasingly realistic, causing South Africans to lose their life savings or valuable goods, and in extreme cases, exposing victims to risks such as human trafficking.

Capitec’s head of financial crime, Nick Harris, told Kaya Biz that scams have increased exponentially over the past four years, since the Covid-19 pandemic.

This surge has been driven by digital adoption and the explosion of online shopping, as South Africans become more comfortable with the digital ecosystem.

Harris explained that there are four broad categories of scams the bank is frequently seeing. The first is marketplace scams.

This happens on platforms such as Facebook Marketplace, where shoppers find goods selling for far below market value.

Often, the sales posts appear real, as they include many photos of the item, and are posted by profiles which have existed for years and even feature photos of themselves and their children.

“They just look super trustworthy, and this has all been intentionally created by the scammer to create a false sense of comfort,” Harris said.

As the shopper deals with the scammer, they will send photos and try to direct them to another platform, such as WhatsApp or Telegram.

Unfortunately, after the payment has been made, the victim realises that the deal was too good to be true, and the scammer disappears.

Harris explained that this type of scam happens with a wide range of products, from fridges and iPhones – which are the most popular items advertised by scammers – to cars and property rentals.

Over the December period, scammers frequently advertise amazing holiday accommodations, such as beachfront villas in KwaZulu-Natal, for a fraction of the price.

Victims will rush to pay the deposits to secure these deals, only to realise after the fact that they have been defrauded.

To avoid falling victim to these scams, Harris advised shopping locally and only paying once the physical item has been seen, especially in cases such as vehicle or property sales.

Interestingly, marketplace scams can also happen the other way around, where the victim is advertising a product, like a laptop or an Xbox, on one of these platforms.

The scammer will express interest and send a fake proof of payment, and pose as an Uber driver picking up the goods. Once the seller has parted with the item, they realise that the payment never cleared.

Investment scams

The second broad category is investment scams. Harris said Capitec has identified around 800 fake investment platforms and apps.

These platforms will claim that clients can invest in things like artificial intelligence (AI), cryptocurrency, and algorithmic trading. They may even use the face of someone like Elon Musk or Johann Rupert to appear more legitimate.

They will also claim that users can make large returns from small investments within a short period, like guaranteeing a R10,000 return on an investment of R1,000 or less in one month.

“The sad thing is, these things look so legit,” Harris said. “They look like an investment platform, and with the use of AI, they create these things in minutes.”

What makes these platforms feel even more real is that they show users how much money they have supposedly earned from their investments.

In addition, when users try to withdraw money from the platform, they often receive small deposits into their bank accounts, which makes it seem like the investments are real.

Therefore, victims often keep pumping money into these platforms, believing they are really making good returns and that they will see their money again, but they never do. “They’ll just tag you along until they’ve taken basically all your money,” Harris warned.

Free flight scams

The third and scariest category of scams – free flights scams – is also pushed on social media platforms such as Facebook, Harris explained.

Scammers will advertise “free flights” to anywhere in the world through major airlines, such as SAA, Qatar, or Emirates.

Once the victim expresses interest, a friendly consultant will call them back and instruct them to download a specific app to claim their free flight.

However, the app is actually advanced, “weapons-grade” malware designed to target the victim’s device. “The scary thing is, this thing is so good, it actually takes over your handset,” Harris said.

“Even if you’ve got selfie biometrics on your banking app, they actually log into your app, they enable your login into your banking platform, and then your face is authorising it, and your account is drained within minutes.”

A number of banks have identified this growing threat and started addressing it. Capitec, for example, has introduced advanced malware detection in its app.

The problem, Harris explained, is that this scam is being run by international criminal syndicates who run “fraud as a service”.

He urged South Africans to take the time to slow down and be aware of where they are shopping and investing online.

“Understand that these deals and people instructing you to download the app are really weird behaviour. As soon as that starts happening, there’s a red flag. Shut it down, end the call, and get hold of your bank,” he said.

Impersonation fraud

The final category of scams is impersonation fraud. This can take several forms, with fraudsters impersonating anyone from courier companies to SARS or even the police.

In courier scams, victims receive an SMS from a fraudster posing as a courier company. They will claim that the victim must pay a certain amount to have their package released.

Shoppers who have used platforms such as Temu or Shein, where they incur additional shipping and tax costs after the initial purchase, may be especially susceptible to these scams.

To avoid falling victim to these scams, Harris urged consumers not to click on any SMS link. Instead, they should pay for any surcharges through the shop’s app or website.

Scammers will also often impersonate the victim’s bank, claiming that there has been fraud on their account and saying that they have minutes to transfer funds to a “safe haven” account, which belongs to the fraudster.

They may even impersonate SARS or SAPS, Harris warned. When scammers pretend to be the police, they may initiate a video call with the victim, alleging that they have intercepted one of their packages, which contained drugs.

They may even have the victim speak to someone who pretends to be a prosecutor, adding to the sense of realism and panic.

The fraudsters will then demand that the victim pay a fine, possibly even asking them to reveal how much money they have in their bank account.

“They create this whole web of fabrication of lies,” Harris said. The fraudsters will use actors and real South Africans to pull off the scam.

Often, the South Africans helping perpetrate these scams were themselves victims of human trafficking. South Africans may fall for job scams which advertise positions for 18 to 30 year olds in countries like Thailand.

Since they have interviews and are flown out to the country, they believe these offers are legitimate. When they arrive, however, their passports are taken, they are moved across borders, and they are forced to participate in these scams.