Johannesburg - Research conducted by Interpol showed that South Africa had the third-highest number of cybercrime victims globally in 2022, with accumulated losses of more than R2 billion.
Chief Underwriting Officer at Santam Broker Solutions Underwriting at Santam Philippa Wild said the attacks were levelled at organisations of various sizes and across sectors such as healthcare, financial services, and online education.
The same Interpol report, which was discussed at a fraud summit this week, showed that the average hack of a small business system could amount to anywhere between R50 000 and R250 000, a cost simply too large for many small businesses to recover in time to save their operations.
Research by the Association for Savings and Investment South Africa showed that South African life insurers detected 4 287 fraudulent and dishonest claims in 2021. This was a significant increase over 2020, where life insurers uncovered 3 186 cases of fraudulent and dishonest claims.
CEO of the Southern African Fraud Prevention Service (SAFPS), Manie Van Schalkwyk, added to the throngs of warnings, saying South Africans are facing an increasingly risk-based landscape when it comes to fraud.
‘’Identity theft has grown by more than 300% between 2021 and 2022. Additionally, cases involving money muling (a money mule is someone who transfers or moves illegally acquired money on behalf of someone else) have increased by 97% in instances recorded in 2021,’’ he said.
Experts said these stats are extremely concerning and highlight the need for an increased conversation at a national level about raising fraud awareness.
‘’In addition, it is important that South Africa makes a stand against fraud and starts putting actionable steps in place to move towards a proactive approach to combat fraud,’’ added Van Schalkwyk.
SAPS spokesperson Brigadier Thandi Mbambo from the Cybercrime and Deep Web Investigation at Division Detective and Forensic Services was unable to provide an overview of cybercrimes reported to the police since the start of 2023.
“Cybercrimes are not reported to the Section Cybercrime Investigation. We provide digital forensic and investigative support services to the operational components. If any cybercrimes were reported, it was reported to the operational units, where it is also investigated,” she said.
In 2018, The Department of Basic Education (DBE) fell victim to a hack, but spokesperson Elijah Mhlanga said the issue was quickly resolved, and another hack hasn’t occurred since then.
“The website went down on the homepage. Images of violence were posted. We quickly took down the website. We do not know who did the hacking. There were no major ramifications, except that people were not able to access the site when they needed it. We restored all the information and put stronger measures in place. The Department and its operations were not affected because we house sensitive information elsewhere,” he said.
Van Schalkwyk said, like other fraud scams, money mule scams are run by professional, well-organised and well-financed syndicates that capitalise on a person's desire to be a Good Samaritan.
‘’One of the most common forms of money muling is when a victim is approached by someone claiming that they need to send money to a family member in another country, and they need a bank account to perform this transaction. Many people willingly let these fraudsters use their bank account,’’ said Van Schalkwyk.
Traditionally, South Africa has been a popular country among fraudsters looking for every opportunity to try and find their next victim. SAFPS statistics indicated a 600% increase in incidents reported by their members in 2022 when compared to 2018. These include conventional advance-fee scams, banking scams, and impersonation scams, where a scammer can take control of a person's identity.
One of the biggest challenges in SA is that consumers often discover that they have become a victim of impersonation fraud after the crime has already been committed.
‘’By this stage, the damage has already been done as fraudsters may have upgraded cell phone contracts, opened clothing accounts, and raked up other significant debts that the victim, unfortunately, has to deal with. The reactive nature of fraud prevention is consumers' biggest challenge, and the SAFPS must deal with it,’’ Van Schalkwyk added.
Since the early 2000s, SA made significant investments in digitalisation, catching up with the rest of the world and the impact technology has had on the future development of many global economies. The penetration of smartphones cannot be underestimated. Research shows that there are currently 26.3 million smartphone users in South Africa. This has grown from 9.7 million in 2014. Digital technology is taking off in South Africa and will be a significant business platform for companies in the future.
‘’While digitisation will revolutionise the South African economy, it has risks. According to a 2021 Interpol report, South Africa tops Africa in cyber threats and is third in the world, with 230 million threats detected in 2021. Of these, 219 million threats were related to emails,’’ concluded Van Schalkwyk.