The first scam trend is a type of phishing scam, where criminals intercept legitimate emails resulting in payments being made to them rather than the rightful recipients.

The office of the Financial Advisory and Intermediary Services (Fais) Ombud reports it has received several complaints of this nature. In one of the most recent complaints, the consumer had lodged a building insurance claim following a storm. However, fraudsters intercepted an email thread including a conversation about an insurance payout of about R53,000.

The imposter then sent an agreement of loss form to the insurance broker and instructed the broker to redirect the payment from the client’s regular bank account to an alternative account (the fraudster’s account).

Steps to avoid email hacking:

• Create strong, unique passwords for your email accounts and other online platforms. Avoid using easily guessable information such as your name or birthdate.
• Always be cautious when receiving emails, especially those requesting sensitive information or financial transactions. If you receive an email requesting financial transactions or sensitive information, verify the authenticity of the request by contacting the sender through a known and trusted communication channel.
• Keep your devices and security software up to date to protect against known vulnerabilities and malware. If you receive an email seeking financial transactions or suspect that your email has been hacked, notify your email provider and follow their instructions.
• Implement strict verification procedures for any changes in customer information or payment instructions. This can include confirming such requests through phone calls or in-person meetings.
• Look out for unusual email addresses, grammatical errors and unexpected attachments or links in your correspondence with the complainant.

Fraudulent funeral policies

The second scam trend, albeit one that has been around for years, involves fraudulent funeral policies. Unlike most life insurance policies, funeral policies do not require medical underwriting tests.

“The perpetrators of these fraudulent policies employ several scams to lure unsuspecting consumers,” the ombud warns.

For example, you might be asked to complete an application for a food voucher, or to enter a competition, or simply to obtain a no-obligation quotation. Assurances are provided that no policy will be issued without you first receiving a phone call from the product provider to confirm the application.

The ombud says these encounters typically take place at a mall or some other public location and your personal information is used to complete the application form. In addition, you will be told to verify an SMS that is sent to your mobile phone, to verify your account details. However, by doing so, you will inadvertently complete a DebiCheck (debit order) process that allows a debit order to be put in place to collect premiums for a policy you didn’t ask for.

In addition to having authorised a funeral policy you didn’t want, the beneficiaries of this fraudulently obtained policy are the criminals and not likely to be anyone you know. The ombud’s office further warns that targeted individuals are mostly unemployed laypeople who are unlikely to comprehend the seriousness of the encounter and the subsequent SMS link which is sent to authorise the debit order.

“The policy is usually active for a few months before the person becomes aware and cancels the policy, requesting a refund without success. The client is then told that an application form was completed by them, and they provided authority to debit the bank account. Therefore, there is no valid basis for a claim of fraud or for a refund of the deducted premiums,” says the Fais ombud, advocate John Simpson. DM