The Ombudsman for Banking Services (OBSSA) has warned South Africa of new banking scams that make criminals easy to make fraudulent purchases via digital wallets.
The OBSSA marked an increase in fraud cases involving near-field communication (NFC) technology that allows customers to pay using Tap-and-go or contactless payments – such as tapping your card or using your smartphone or smartwatch at a point of sale (POS) machine
“The new scam involves fraudsters using stolen bank card information such as the card number, expiry date and the CVV number to make fraudulent purchases via the digital wallet,” said Reana Steyn, the ombud for banking services, in a statement.
“Unlike with other card-not-present fraudulent transactions where fraudsters use stolen card data to make online purchases in a way that would prompt an one-time Pin (OTP) to be sent to the cardholder’s cellphone, NFC/digital wallet payments do not require [two-step authentication via OTP],” Steyn said.
The new fraud is linked to stolen bank information to a smart device and then to digital payments platforms like Apple Pay and Google Pay. It is easy to create fraud once you have linked the bank information to payment platform as they do not require an OTP.
According to Steyn about 124 NFC fraud-related complaints have been reported and investigated.
“This is a clear indication that an international crime syndicate is operating within this space and has South African consumers in its sights”, said Steyn.
One of the central banks in South Africa was confirmed to have received over 6,000 related complaints between January 2022 and 1 June 2023.
Between January and June 2022,about 553 customers fell victim to this fraud, with their losses amounting to approximately R427,487, the bank’s stats shows.
