How to avoid financial scams

Coming up to the festive season you may let your guard down more easily in your mad rush to get your shopping done on time. There are also email scams that do the rounds, targeting vulnerable people who may be looking for extra cash at this time of year. Old Mutual recently debunked one such scam offering loans.

Not only is it important to keep an eye on your card when paying at till and service points, but it is also vital to be vigilant when using the ATM.

Lee-Anne van Zyl, CEO of FNB Points of Presence, noted: “As the festive season nears, we would like to urge ATM users to practice extra caution when using ATMs. Scammers are constantly looking for ways to defraud unsuspecting customers. However, there are important safety precautions that if followed, can lessen the chance of being conned.”

Protecting your information at an ATM

When at the ATM, never ask strangers for assistance, not even the security guard. If you have any concerns or queries, rather visit a nearby bank branch. Van Zyl also emphasised that you should never force your card in the ATM. If your card is not accepted by the machine, it may have been tampered with, and never use an ATM that looks faulty or shows signs of tampering.

Not only is it important to be vigilant and careful when using the ATM, but there are other aspects of your banking that you should be cautious with. Keeping your ATM PIN confidential is one of them. There are a number of tips you can follow to help keep your PIN safe:

• Keep your ATM PIN confidential, never share it with anyone even friends and family and don’t write it down.
• Don’t make your PIN combination easy to guess – such as a birth date.
• When transacting, cover the key pad with your hand - scammers can place cameras to record your PIN as you punch it in.
• Stand as close as possible to the ATM and never let anyone stand close or distract you while transacting.
• Do not enter your PIN on a screen that is unfamiliar to you. Carefully read the instruction on the ATM screen before entering your PIN.

Once you have finished at the ATM, observing your surroundings is still important. People may have watched you at the ATM. Van Zyl advised: “Once cash has been withdrawn, immediately place this out of sight. Avoid handling cash in public view and secure your wallet and handbag before leaving the ATM.”

When it comes to your daily withdrawal limit, set a realistic daily limit, and regularly check your bank statement to ensure there is no irregular activity on your account. If you detect any suspicious transactions, report them to your bank immediately.

Van Zyl further suggested using your debit card to make payments, rather than paying for things in cash.

“Be wary of strangers that may call you back to the ATM to complete a transaction. They often ask for assistance or offer to assist you. Once you have completed your transaction, leave as soon as possible and avoid conversation with strangers. If you are disturbed, while transacting at the ATM, your card may be skimmed, by being removed and replaced back into the ATM without your knowledge. Cancel the transaction immediately,” added van Zyl.

How to spot a scam

Theft and fraud at an ATM are not the only things to keep an eye out for. Hundreds of emails are sent daily to unsuspecting people, offering them loans at unbelievable interest rates, or informing them that they have won a prize, but need to transfer money to a person to receive it. If you receive an email from an unknown source, and especially if it is involving money, do not open or respond to it.

Stuart Marshall, CEO of Old Mutual Finance, noted: “Criminals are using the trust and good name of financial services providers to try to gain the confidence of consumers and to dupe them. The simple advice is, be streetwise and don’t fall for it.

“We must all be vigilant about these ploys because they’re becoming ever more sophisticated. Among these are unsolicited emails that may be presented as a communication from Old Mutual using fake Old Mutual letterheads and logos, or falsely claiming to originate from an Old Mutual financial adviser.”

Marshall offered the following tips to help you identify a scam:

• The email address: oldmutualloan@safrica.com for example is clearly bogus as “safrica” isn’t Old Mutual’s domain. A registered, legitimate company will have its own domain reflected in its email address.
• Beware of emails that ask you to reply to an email address that differs from the sender’s. So a sender’s email address such as “application form from oldmutualloan@safrica.com” asking you to reply to “loan approval from oldmutualfinancialloan@consultant.com” is clearly not legitimate.
• Emails that ask you to make payments to a bank account that is held in the name of a person, rather than a company.
• Poor grammar or spelling is generally a give-away, or at least a warning to be wary. So are logos that look as if they’ve been copied and pasted from elsewhere.

• Be suspicious if an offer or return on investment seems too good to be true. A loan with an interest rate of three percent, when the prime lending rate is 9.5%, for example, should trigger alarm bells.

Old Mutual further advised:

• Beware of loans offered by email. In particular, beware of a request for an upfront administration fee. As a customer, you should never be required to pay this.
• Remember that online offers that look too good to be true, usually are!
• Be aware of how cybercriminals manipulate their victims: they may, for instance, impersonate someone or pretend to be from your bank.
• Never open an email you don’t trust.
• Be suspicious of anybody asking for sensitive or personal information – and never disclose this kind of information to strangers.
• Choose a strong password, change it regularly and don’t share it.
• Only insert removable devices like memory sticks and hard drives if you trust the source.

Marshal stated: “Do not under any circumstances get involved in these scams, no matter how enticing they seem. In fact, our experience is that the more lucrative or unbelievable they seem, the likelier they are to be a scam.”

What to do if you are a victim

There are a number of steps you can and should follow if you are a victim of fraud or a scam. The most important would be to contact your financial services provider to inform them of the situation, and to cancel any credit or debit cards, or any payments that may be associated with the crime.

Old Mutual suggested:

• Don’t keep quiet because you feel that others will criticise or mock you for falling for the scam. Your experience can help the police and other consumers.
• Change your banking passwords and PINs as soon as possible.
• Don’t contact the fraudster. Again, if it sounds too good to be true, it almost certainly is. Never share your banking details or agree to make payments to them.
• When in doubt, find out more about an email or SMS that you received. For example, contact Old Mutual’s Customer Service Centre if you want to double-check on legitimate promotions or special offers run by Old Mutual. Call 0860-50-60-70 or 0860-44-54-45. If your query concerns a bank, phone the bank’s customer service centre which should be able to put you in touch with the right person to help you.

Marshall added: “If you suspect that an offering on an Old Mutual letterhead (or mentioning Old Mutual) might be a scam, immediately call Tip-Offs Anonymous on 0800 222 117.”

 Handy tip: You can compare a range of banking products on Justmoney.