Online fraud: what it is and how to protect yourself.

One of our previous articles introduced you to what cyber security was all about, and some generic ways of staying safe online. Today we’re focusing specifically on online fraud, because it forms an important part of your knowledge of the online world. Online fraud is something you need to know about, know how to protect yourself from and also understand what to do if you become a target of it.

What is fraud?

Fraud is an act of deception, which is intended to result in financial or personal gain for the person or people committing the act. It is a legal and criminal offence and penalties vary in severity (including prison time and fines). Examples of fraud include changing numbers on financial statements, embezzling and impersonating other people or organisations (especially for the purpose of participating in financial transactions).

What is online fraud?

Online fraud happens when fraudulent activity is carried out using the Internet, or Internet-related technology. It is also considered a legal and criminal offence, and has the same consequences as ordinary fraud that doesn’t involve use of the Internet. Examples of online fraud include the use of viruses which track keystrokes, to harvest passwords for people who shop or bank online, then using those passwords to make purchases or send money from the target or victim’s bank account.

Is online fraud the same as cyber theft?

We understand why a lot of people think this, but technically speaking these are two different things. These may be common because during fraudulent activity, theft usually will occur, but cyber theft does not always rely on fraudulent activity. For example, a hacker might commit cyber theft but may not need to pretend to be someone else in order to do so.

A hacker may bypass banking security measures and not necessarily need your personal online banking logins to move money out of your account. Because banks typically have some of the most advanced digital security systems, it’s very unlikely, but it doesn’t mean that your risk level is zero. (HINT: this is why we launched our Cyber Rescue product: to help people just like you prevent financial losses as a result of cyber attacks).

What are the main types of online fraud?

There are so many situations in which fraudulent activity happens. We want to focus on just these, today, because smartphones have pretty much taken over how we communicate, shop and even bank:

Types of online fraud: communication

This happens often and maybe you’ve already been a victim or you know someone who has. Your social media or instant messaging app on your phone is vulnerable to being hacked and someone else pretending to be you when having conversations with your friends or connections. This method of fraud is often used to con the people who trust you into blindly sending money to an unknown bank account, by pretending that you’ve endured a sudden and extreme trauma, and need that money to survive.

Types of online fraud: shopping

Online shopping is a growing trend in South Africa, which means that you’re probably using more apps and website to shop now, compared to a year ago. Many suspicious websites and mobile apps are not regularly updated for security purposes, which makes users (like you) vulnerable to cyber attacks and online fraud. This method of fraud is used to make purchases under the radar (less than what you may get a bank notification for) and then hustle the online retailer for refunds into a third party bank account, or it can be used to transfer any loyalty programme points and cashback value out of your account.

Types of online fraud: banking

This is the most critical type of online fraud, especially for salaried employees who depend on their bank accounts as a nucleus for almost every other aspect of their lives, from paying housing and transport costs to having enough for groceries every month. If your password isn’t strong enough or you get confused by a copycat website that mimics your bank’s website, you could become a victim of this. Insurance fraud is linked to online banking fraud, because if your online banking profile is compromised, new debit orders can easily be authorised, usually under the guise of an insurance debit, which would appear less suspicious to you if you check your bank statements regularly.

Can online fraud be prevented?

In most cases, yes. Wherever there’s a loophole in prevention though, there are steps you can take to reduce the impact of online fraud on your life. The first step in preventing online fraud is to take it seriously and understand that as long as you’re personally transacting online, you’re at risk.

This is why preventative measures, like our Cyber Rescue product (with unlimited access to a dedicated IT helpline and an antivirus subscription to protect all of your personal devices) are worth considering. Check your bank and credit card statements regularly, including your order history on the online shopping platforms and profiles you use. If you notice something suspicious, you can call our IT helpline for advice, if you’re a Bidvest Insurance Cyber Rescue client, or you can report a case of fraud.

How to report online fraud:

If you’re a Bidvest Insurance Cyber Rescue client, you can call our dedicated IT helpline for advice if you notice something suspicious or you think you may be the victim of cyber theft. Here are three other actions to take in order to report online fraud and protect yourself from further financial or legal damage as a result:

  1. Contact your online retailer. Call, email and leave a message using a website contact form. Let your retailer know your profile ID (important not to use your ID number, but rather your membership or profile ID number) and as much detail about the incident as you can provide.
  2. Contact your bank. If a transaction has occurred it is of utmost importance to act on this immediately and to request a reverse of a debit from your card or account, if possible. Provide as much detail as you can, and ask for assistance if you’re not sure about how to execute the instructions you receive from the bank.
  3. Contact authorities. Online fraud is a criminal offence and South Africa’s Cybercimes Bill makes provisions for the investigation into such matters. Especially for instances of severe impact, we encourage that you speak with your local SAPS officers to open a case of fraud.

Online fraud and social media accounts

With more and more people around the world relying on the Internet to connect with each other, the risk of online fraud is growing. Your personal social media accounts may contain a lot of information about you, or link to your mobile number which, by law, is RICA’d and registered onto a national database in South Africa. This means your ID number is linked to your mobile number, and the risk only grows as you depend on the Internet for day-to-day activities like shopping, banking and communication.

The best way to protect yourself from online fraud, including on social media, is to protect your devices, think ahead and get covered (click here to find out how Cyber Rescue works). Make sure you’re using strong passwords that have letters, numbers and symbols, and that you steer clear of social media games that depend on you to share personal information that might be linked to your security questions for any account you have online.

Sources:

https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/internet-fraud

https://languages.oup.com/google-dictionary-en/

https://law.lclark.edu/live/news/6855-what-is-online-fraud

https://www.biznews.com/business-unusual/2020/10/14/sa-e-commerce-growth-drives-demand-for-logistics-spaces-equites-property-fund

https://theconversation.com/is-your-super-money-safe-heres-how-you-can-dodge-cyber-fraud-139758

Cover for you and for your car.

Bidvest Insurance offers a wide range of insurance products to meet both your personal and vehicular needs.

Insurance options for you:

  • Cyber Rescue
  • Legal Angel
  • Personal Accident Insurance

Insurance options for your car:

  • Scratch and Dent
  • Tyre Angel
  • Theftbuster Plus
  • Warranty
  • Driver Assist
  • Key Angel

Simply complete your details so a Bidvest Insurance consultant can call you back to assist you.

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