Alleged card machine scammer caught stealing over R1-million

The Hawks have arrested a 27-year-old suspect for allegedly selling counterfeit card machines to a Tsomo hotel owner last year, resulting in over R1 million in stolen revenue.

The suspect allegedly approached the hotel owner claiming to be a representative of payment systems provider Yoco Technology.

Yoco offers payment systems such as card machines to over 200,000 South African businesses. Tsomo is a town in the Eastern Cape.

The hotel owner said they purchased three speed point machines from the suspect for R3,500.

However, the complainant alleged they noticed the funds never appeared in their business account after a few months of using the card machines, which prompted them to open a fraud case with the Hawks.

Between July and September 2023, the suspect allegedly defrauded the complainant out of R1.2 million in business revenue.

After tracing the bank account into which the funds were being funnelled, the Queenstown-based Serious Commercial Crime Investigation unit of the Hawks tracked down and arrested the suspect, who was living in Kidd’s Beach, East London.

The suspect appeared in the Mthatha Regional Court on 25 September 2024.

Social engineering fraud has become prevalent in the banking sector.

The South African banking industry has observed a recent uptick in clients being cheated by fraudsters posing as bank officials, tax officials, or investment companies.

Standard Banked has also warned that vishing — or phishing via phone calls — has become the most significant contributor to app banking, digital banking, and card-related fraud.

“Unlike phishing scams, which deceive people into clicking on links in texts and emails, vishing calls trick people into sharing sensitive banking information or taking actions that compromise the security of their bank accounts,” it said.

According to Standard Bank, scammers tend to target older people approaching retirement or who have recently received their cash payouts, proposing high-return investment opportunities.

This includes persuading victims to transfer their funds into fictitious investment accounts.

Some scammers use another approach and attempt to create panic by claiming that the victim’s bank account is vulnerable and urging them to move their money into a “safekeeping” account.

According to Standard Bank’s head of digital and e-commerce, Belinda Rathogwa, the bank will never call clients to request that they transfer money into an account that isn’t theirs.

“If you are going to invest your hard-earned money, verify the details of the investment company that you are dealing with. Check that they are registered with the Financial Services Conduct Authority (FSCA),” she added.

She noted that fraudsters convince victims to keep quiet and not share details about the fraudulent transactions with their banks or loved ones, hoping to avoid early detection.

“This social engineering tactic leaves little recourse for consumers, so that many are unable to recover all of their lost funds and most don’t recover any of their money, even with their bank’s assistance,” says Rathogwa.

Social engineering refers to the psychological manipulation of individuals to get them to divulge confidential information or perform specific actions.

She said scammers have shifted to social engineering techniques over the phone as banks have increased risk controls to prevent unauthorised account access. This forced fraudsters to find new ways to trick banking clients.

Standard Bank has launched a security feature designed to address this threat. The Mobile Banking App now alerts clients to potential vishing threats.

Customers can activate the feature and provide consent to be notified of suspicious calls.

“Our data shows that a growing number of older clients make use of our app. Any additional security features on the app can therefore play a big role by protecting them,” said Rathogwa.