With the festive season in full swing, online shoppers and merchants are warned of rising levels of cyber-crime, as more local consumers opt to purchase goods online instead of visiting physical retail stores.
According to software solutions provider, Specno the past year has seen a significant increase in the move from offline to online transactions in SA. Detecting and preventing online scams should be paramount for online retailers who are experiencing an increase in traffic due to the holiday shopping season.
While online shopping-related scams are nothing new, this year more South African customers took to online shopping during the Black Friday shopping period, resulting in a significant upswing in scams using sophisticated methods targeting online shoppers and retailers.
Jacques Jordaan, CEO and co-founder at Specno, notes in order to protect the integrity of their businesses, as well as the money transferred by their customers, online merchants should implement secure payment systems that comply with industry standards.
“These include payment card industry data security standards which protect the bank card data during and after the transaction. Merchants must also deploy encryption and security protocols such as security socket layers and transport layer security encryptions and multi-factor authentication, among others,” explains Jordaan.
“According to the latest crime statistics from the South African Banking Risk Information Centre, (SABRIC) the most common type of online fraud in South Africa is phishing scams, which include the use of fake websites that mimic real ones. Most of these schemes operate through deceptive, ‘fake’ portals that request the victim to sign in to their account.”
Another highly popular type of fraud in SA is account takeover, otherwise known as ATO, he adds. This modus operandi entails hackers gaining access to a customer’s online account details, and using this information to either withdraw money or gain access to other victims’ accounts.
“Once your credentials have been provided, your information is stolen, and your account is logged into and the password changes, locking you out of the account. By the time the victim has regained access, the damage has been done, and the bot, or scammer on the other end, has already made multiple withdrawals from the victim’s bank account.”
The SABRIC annual crime statistics indicates that in 2022 digital banking fraud rose by 24%, generating losses of up to R740.8 million in SA.
According to LexisNexis Risk Solutions, global e-commerce fraud is increasing, with losses reaching $41 million in 2022 and predicted to exceed $48 billion by the end of 2023.
“While consumers have continued to battle this onslaught in online fraud, there has also been a global increase in fraudulent discounts and coupons from 25% in 2022, to 30% in 2023. Scams and attacks are increasing yearly, merchants and customers alike need to be vigilant and aware of the dangers online if they want to mitigate their risk against this theft,” asserts Jordaan.
Merchants would be well-advised to proactively communicate and educate their customers on how to look out for common scams when making purchases online, he adds.
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