Cellphone phishing accounted for 46% of the total internet banking-related complaints received by the ombudsman in 2013 – a 27% increase on 2012.
Cellphone phishing involves fraudulent e-mails and text messages being sent to unsuspecting bank customers in an effort to extract confidential internet banking credentials.
According to Nicky Lala-Mohan, a board member of the Ombudsman for Banking Services (OBS), SIM swaps will become a bigger problem going forward. “The fact that cellphone companies are also implicated creates additional liability,” he said.
SIM swapping is where an individual (in this case the fraudster) replaces a SIM card on a particular cellphone number so that all bank communication is directed to the replacement SIM card, such as once-off passwords used to transact via internet banking.
Johan Conradie, investigations manager at the OBS, said no sooner had banks advanced security to combat SIM swaps, than fraudsters started teleporting numbers from one cellphone service provider to another.
Where there was negligence on the part of cellphone companies, the ombud referred cases to the Independent Communications Authority of South Africa (Icasa).
ATM fraud climbs
Of the 4 613 cases opened by the ombudsman in 2013, 37% were related to fraudulent ATM transactions – a 6% year-on-year increase. “The internet banking onslaught against Capitec continued well into 2013, increasing the number of complaints against the bank,” said Edrich Buytendorp, case processing and assessments manager at the OBS.
Capitec had 867 files opened against it in 2013 – an increase of 615 from 2012. Buytendorp said this was on account of its growing customer base.
Conradie explained that fraudsters often opened accounts for the sole purpose of facilitating fraud. “Where banks fail to act in line with their duty of care when opening accounts, or don’t stop accounts timeously after fraud has been reported, they could be held partly or fully liable for damages suffered by the customer.”
Cases opened against Standard Bank, which increased to 980 in 2013 (2012: 845), were largely ATM-related.
Absa were down from 1 335 in 2012 to 970 in 2013. FNB also saw complaints fall, to 927 (2012: 1 260), while complaints against Nedbank climbed by 40 to 688.
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