In South Africa, banking fraud accounts for a significant portion of reported fraud cases. Identity theft has surged by 337% compared to last year, reaching its highest level recently, with criminals opening accounts using stolen identification cards.
According to Manie van Schalkwyk, CEO of the Southern African Fraud Prevention Service (SAFPS), fraud cases have consistently increased over the past five years, becoming one of the major challenges faced by South African citizens.
He noted, “This increase is alarming and indicative of how South Africans have become easy targets for fraudsters and scammers who are highly motivated to find their next victim.”
Additionally, van Schalkwyk pointed out that certain sectors are more vulnerable to fraud than others, with banking fraud representing 45% of the reported fraud incidents last year. This was followed by the microfinance sector (19%) and the clothing retail sector (14%), indicating that financial institutions and the retail sector are under significant pressure regarding fraud.
According to TransUnion’s Consumer Pulse Report, three out of five South Africans have encountered some form of digital fraud.
The economic instability in South Africa is a key factor contributing to this increase, as unemployment and income inequality push many individuals towards committing crimes or becoming victims.
Van Schalkwyk mentioned, “To provide for their families, many more employees are turning towards application fraud,” highlighting the severe consequences of this situation.
Banks and other financial institutions are attempting to combat this issue through awareness and warnings, emphasizing the need for increased education and the reduction of unemployment as long-term solutions.
