In today’s digital age, phishing scams have become a significant threat to investors. These scams often involve fraudsters impersonating legitimate financial services companies to steal personal information or funds.
In this article, we look at some real examples from the industry and explore practical strategies to avoid falling victim to these scams. Prevention is always way better than cure.
“Obviously crime pays, or there'd be no crime.” (G. Gordon Liddy)
It’s an unfortunate reality that you can’t be too careful with your money these days. For all that modern technology has done to enhance our lives, it has also sadly made it easier for criminals to operate.
It’s no longer necessary for the bad guys to break into a bank to steal large amounts of cash. These days scammers are able to make millions by tricking you into just handing your money over.
One of the most common ways for them to do this is through the practice known as “phishing”. This is when scammers disguise themselves as trustworthy entities to get you to reveal sensitive information like passwords, credit card numbers, or other personal data.
This is often done through deceptive emails, messages, or websites that appear legitimate. So, you have to be alert to what they are doing
Real examples
There is a trend in South Africa at the moment for scammers to impersonate local fund managers. Allan Gray recently sent out a warning that some of its clients were being targeted by scammers who led them to believe that they either have money available to claim or that their security with Allan Gray has been compromised.
The intention is to get people to then disclose personal information, including their usernames, passwords and one-time pins to their Allan Gray accounts.
Smaller firms are being impersonated too. The Financial Sector Conduct Authority (FSCA) recently warned that scammers have impersonated Denker Capital on platforms like Telegram.
It’s important to note that the sophistication and scope of these scams is increasing. They are also no longer limited to email. They could come over WhatsApp, Facebook or even in a direct phone call.
How to protect yourself
1. To avoid being caught, the first step is always to verify the legitimacy of any communication claiming to be from a financial services company. Official companies will never request sensitive information like passwords or PINs via email, over the phone or on social media.
If you receive a suspicious message, contact the company directly using their official contact information. For example, if you receive an email from a company like Allan Gray asking for personal information, call their official number listed on their website to confirm the request.
2. Scammers often create fake websites, social media accounts and email addresses that closely resemble those of legitimate companies. Pay close attention to slight misspellings or variations.
For example, scammers might use “neddank.co.za” instead of “nedbank.co.za”. Always double-check the URL before logging in or providing information.
3. Use two-factor authentication to add an extra layer of security to your online accounts. Even if a scammer obtains your password, they won’t be able to access your account without the second form of verification, which is usually a code sent to your mobile phone or email.
Your investment accounts should always be set up this way. This can prevent unauthorised access even if your password is compromised.
4. Never click on links or download attachments from unknown or unsolicited emails. Scammers often use these methods to install viruses on your device or redirect you to fraudulent websites.
If you receive an email from what appears to be Sanlam or Old Mutual, for example, and there is an attachment titled “Urgent Account Update,” avoid opening it. Instead, log in to your account through the official website or contact customer service to confirm that the message is legit.
5. Regularly update your knowledge about common phishing tactics and how to recognise them. Financial institutions often provide resources and tips on their websites.
Many companies as well as the FSCA also often share alerts about new phishing scams targeting South African investors.
Final thoughts
Protecting your investments from phishing scams requires a proactive approach. Verify communications, authenticate websites, use two-factor authentication, be cautious of unsolicited links, and continuously educate yourself.
By following these steps, you can safeguard your financial future against the ever-evolving tactics of scammers. Remember, the key to avoiding phishing scams is not just being aware but also taking concrete actions to protect your assets.
To discuss how to protect your investments, speak to us.
Disclaimer – *The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
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