South African deposit and refund scam warning

The South African Banking Risk Information Centre (Sabric) has launched its Schemes and Scams Campaign, aimed at creating awareness around banking scams in the country.

“Consumers need to take the power into their own hands by ensuring they are informed on how to protect themselves, especially when doing business online,” said Kalyani Pillay, Sabric CEO.

The first phase of Sabric’s Schemes and Scams Campaign focusses on the fraudulent change of bank account details scam, and deposit and refund scams.


Fraudulent Change of Bank Account Details Scam

A potential business victim receives an email or letter informing them a supplier of theirs has changed their bank account details.

The correspondence will include the details of the new account. You will be asked to make future payments into the new account – these details are fraudulent.

In certain instances, the fraudster also phones the victim about the bank account details change.

The call will be used by the fraudster so they can extract information to make their email/letter more authentic.

Criminals use social engineering to accumulate the information they need for this scam, and corporates, and their clients and partners, are targets.


The Deposit Scam

A criminal orders goods or services from a business and makes a payment into the victim’s account, normally through a fraudulent cheque.

Proof of payment is then sent to the business and goods are delivered to the criminal.

The bank then processes the cheque, it is deemed fraudulent, and no funds are transferred to the victim’s account.

In other instances, the order is cancelled and an urgent refund is requested.

Alternatively, a payment is made in “error” and an urgent refund is requested.


The Refund Scam

This scam is characterised by a fraudster requesting a quotation for a specific service or goods.

“Payment” is then made and proof of payment is provided for an amount that far exceeds the quotation.

For example, if the quotation is for R2,990, the fraudulent deposit would be for R22,990.

The supplier’s office would then be contacted and an urgent refund would be requested.

The service provider will go through their records and notice an extra amount has been paid – they then refund the “overpayment”.

They later notice that the original deposit was reversed as it was made with a fraudulent cheque.


How to avoid the change of bank account details scam

  • Maintain a good relationship with suppliers and know your contacts.
  • If called by a supplier, ask to speak to your known contact. Do not take instructions from staff at the supplier who are unknown.
  • Beware of confirmatory emails from almost identical email addresses, such as .com instead of .co.za.
  • Instruct staff to scrutinise invoices for irregularities and report suspicious documents.
  • Ensure that your company’s private information is not disclosed to third parties which are not entitled to receive it.
  • Shred invoices or communication material that contain letterheads instead of discarding them in rubbish bins.

How to avoid the deposit and refund scams

  • No refund should be made without verifying with the bank that a deposit is valid.
  • Wait for all cheque deposits to be cleared before providing goods/services.
  • Protect personal and company information.
  • Staff dealing with finance in your organisation should be educated about all scams.

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South African deposit and refund scam warning