SA Fraud Summit 2023: A proactive approach


South Africans are facing an increasingly risk-based landscape when it comes to fraud. “Our research shows that identity theft has grown by more than 300% between 2021 and 2022. Additionally, cases involving money muling have increased by 97% over instances recorded in 2021,” says Manie Van Schalkwyk, CEO of the Southern African Fraud Prevention Service (SAFPS).

These stats are extremely concerning and highlight the need for an increased conversation that needs to occur at a national level about raising fraud awareness. “In addition, it is important that South Africa makes a stand against fraud and starts putting actionable steps in place to move towards a proactive approach to combat fraud,” says Van Schalkwyk.

As the custodian of fraud prevention in Southern Africa, the SAFPS is holding its annual fraud conference on 17 May, where several key issues will be discussed.

Money muling: a growing international problem

Like other fraud scams, money mule scams are run by professional, well-organised and well-financed syndicates that capitalise on a person’s desire to be a Good Samaritan.

“One of the most common forms of money muling is when a victim is approached by someone claiming that they need to send money to a family member in another country and they need a bank account to perform this transaction. Wanting to help, many people willingly let these fraudsters use their bank account,” says Van Schalkwyk who adds there are many other ways an individual can become a victim of money muling.

While this may seem like an innocent crime, the repercussions of becoming a money mule are significant. These will be focused on during a panel discussion that includes Manie Van Schalkwyk, David Pegley, the CEO of the Australian Financial Crimes Exchange, and Mike Haley, CEO of Cifas.

Scams: a low-hanging fruit

Traditionally, South Africa has been a popular country among fraudsters looking for every opportunity to try and find their next victim. SAFPS statistics point out that there was a 600% increase in incidents reported by their members in 2022 when compared to 2018. These include your conventional advance-fee scams, banking scams, and impersonation scams whereby a scammer can take control of a person’s identity.

“We need to be cognizant of the fact that there are a plethora of scams that the public can fall victim to, and these are growing every day,” says Van Schalkwyk.

Nazia Karrim, Head of Product Development at the SAFPS, will be delivering a presentation that discusses the current tactics that are used by scammers as well as an exciting future SAFPS offering that will change the narrative when it comes to approaching fraud prevention from a proactive standpoint.

Taking ownership of your biometrics

One of the biggest challenges in South Africa is that consumers often discover that they have become a victim of impersonation fraud after the crime has already been committed.

“By this stage, the damage has already been done as fraudsters may have upgraded cell phone contracts, opened clothing accounts, and raked up other significant debts that the victim, unfortunately, has to deal with. Therefore, the reactive nature of fraud prevention is consumers’ biggest challenge, and the SAFPS must deal with it,” says Van Schalkwyk.

Dalene Deale, Executive Head of Secure Citizen, will be doing a presentation with Diederick Stopforth, Sales and Executive Head of Skynet, on Empowering Citizens in the Fight Against Fraud. The presentation will highlight the value that businesses can take advantage of when citizens use innovative solutions to secure their identities and address the gaps that fraudsters hope to exploit.

The risks of the digitalisation

Since the early 2000s, South Africa has made significant investments in digitalisation, catching up with the rest of the world and the impact technology has had on the future development of many global economies.

The penetration of smartphones in South Africa cannot be underestimated. Research shows that there are currently 26.3 million smartphone users in South Africa. This has grown from 9.7 million smartphone users in 2014. Digital technology is taking off in South Africa and will be a significant business platform for companies in the future.

“While digitisation will revolutionise the South African economy, it has risks. According to a 2021 Interpol report, South Africa tops Africa in cyber threats and is third in the world, with 230 million threats detected in 2021. Of these, 219 million threats were related to emails,” says Van Schalkwyk.

Guy Shannon, Executive Head of Cyber Security Operations, will deliver an in-depth presentation on the current cyber security threat paying specific attention to the current trends in the industry.

A hotbed of fraudulent activity

The South African insurance industry has been an industry that has been a traditional hotbed for fraudsters.

According to research by the Association for Savings and Investment South Africa, South African life insurers detected 4 287 fraudulent and dishonest claims in 2021. This was a significant increase over 2020, where life insurers uncovered 3 186 cases of fraudulent and dishonest claims.

During his presentation, Garth de Klerk, CEO of the Insurance Crime Bureau, will discuss the current landscape.

Knowledge is power

Given the increasing fraud landscape and the fact that new risks are emerging daily, Van Schalkwyk feels that a national discussion is essential and that the SAFPS will have a vital role to play in the future of fraud prevention.

“We cannot let fraudsters and scammers get the upper hand. We have covered several important topics in this year’s conference and will endeavour to secure relevant content for future conferences. Knowledge is power, and we have to give consumers every opportunity to be aware of the landscape that faces them,” says Van Schalkwyk.

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