Retirees and fraud – Effective methods to ensure your protection.

Retirees and fraud – Effective methods to ensure your protection.

Fraudsters frequently target retirees, but with some awareness, you can prevent falling victim to scams.


Globally, retirees are facing an escalating risk from fraudsters. These individuals are targeted due to their potentially higher savings and the perception that many retirees may have limited tech-savvy skills.

In South Africa, the situation is similar. According to the South African Fraud Prevention Services, the country is a favored target for fraudsters. There has been a 600% surge in fraud incidents from 2018 to 2022, and retirees are prominently featured among the primary targets. Criminals employ intricate schemes, often exploiting emotions like fear and compassion, to deceive individuals and strip them of their savings.

Gaining insight into the tactics of scammers and adhering to a set of fundamental guidelines whenever you encounter a call, text message, or email can significantly contribute to safeguarding your savings and investments from fraud.

In this exclusive episode of the Investec Focus Radio SA podcast, Kevin Hogan, Investec’s Head of Fraud Risk, is joined by René Grobler, Head of Investec Cash Investments, to outline strategies for avoiding falling prey to various types of fraud.

Phishing, smishing, vishing

Phishing stands out as one of the prevalent forms of fraud. It involves receiving an email that appears to be from a legitimate source, such as your bank, telecommunications provider, or SARS, with the aim of luring you into sharing information or clicking on a link.

“They’ll put a link in an email, that will say for example that there’s an outstanding payment due. They’ll tell you to click on that link and it’ll send you to a fake login page,” explained Hogan.

“The whole point of the phishing expedition is to get you to give away your username and password or engage with the link or attachment. There’s a chance you could download a virus if you click on that link or attachment in the document. It’s really to get people to engage with the email in a way that would then lead them down this garden path. You think you are logging onto a genuine page but you’re not.”

Closely linked to phishing is smishing (SMS phishing), which follows a similar pattern but involves a link within an SMS.

Vishing, or voice phishing, is a frequently employed tactic by fraudsters. In this scenario, an individual calls you, claiming to represent a financial institution, retailer, or service provider, with the intention of persuading you to disclose crucial information, like a password, in an attempt to gain access to your account.

Perpetrators often employ sophisticated tactics and may possess a significant amount of your personal information, enhancing their appearance of authenticity, as highlighted by Hogan.

“For example, in the UK specifically, people get phoned by a fraudster who pretend to be from their bank and tell them that there has been fraud on their account and they need to move their money to a safe account. All of that is done over the phone and they can quote your card numbers as well as other information that they’ve managed to steal in order to convince you that it’s real.”

The primary objective of a phishing expedition is to persuade you to disclose your username and password or interact with the provided link or attachment.

Likewise, you might receive a call, text, or email from a courier company regarding a legitimate order you placed. The fraudsters are well-informed about your order details, having somehow gained access to this information.

“Your head and your heart is saying to you, this is completely genuine. They’re using the correct courier company. They’re using the correct tracking number.”

“And typically what happens is that you click the link and the screen opens asking for your card information. You fill that in and the fraudsters then have your card information that they load onto their cell phone to make payments.”

“They then send you a one-time password (OTP). You think it’s a payment OTP but it’s not. The OTP is actually to authorize your card information to be loaded on the phone.”

The lesson here, said Hogan, is to always verify the email, SMS or call independently whenever you are contacted in this way. “And never use the number that they’ve sent you. Go back to the original mail. Just Google it [the real company] and go through that process [of calling the call center or emailing the real company],” he advised.

Common types of fraud targeting retirees

Grobler and Hogan then went into some of the more common forms of fraud against retirees. High on the list are investment scams.

“We’re finding a lot of people who are on the brink of retiring or have retired already, but find that they don’t have enough for retirement, or that they’re outliving their retirement funds. They want to supplement their income, so if an attractive investment opportunity comes by they want to do that,” he explained.

Regrettably, numerous individuals fall victim to these fraudulent investment schemes. The websites mimic authentic platforms, complete with a login system requiring a username and password.

People usually don’t realize it’s fake until it’s too late.  “We’ve had clients who have come to us many months later after paying the money to say they think they’ve been scammed,” he said.

People usually only realize when they try to take their money out and find obstacles to do so.  “Unfortunately the money’s usually long gone by then,” he said.

Five strategies for ensuring online safety.

In addition to the aforementioned, here are essential methods to prevent becoming a target of fraudsters:

  1. Ensure to save the websites of your regular service providers, such as your bank or medical scheme, as bookmarks.Often, people go into Google and they look up their bank or service provider and click on the first link they see. Fraudsters prey on this habit. We’ve even seen an instance where they created a fake banking page,” explained Hogan.
  2.     Refrain from employing identical passwords across multiple accounts and avoid using weak password combinations. If fraudsters gain access to one of your passwords, it can potentially compromise other accounts, exposing individuals to risks. Ensure your passwords are robust, incorporating a combination of letters, numbers, and special characters. While this may seem challenging, utilizing a password manager provides an effective means of securely storing numerous passwords. “Otherwise, do what my mom does,” said Hogan. “She’s got a nice leather-bound book, and she writes all the passwords in the book.”
  3. Take immediate action if your smartphone or card is lost or stolen. Hogan recommended initiating the process by contacting your bank to block your account. Additionally, he cautioned against storing passwords on a mobile phone. “Don’t use the keychains. Even though the keychains are very convenient, if you lose physical possession of your device, the fraudsters get the device password,” he said.
  4. Steer clear of links on social media or websites that promote investments that appear overly enticing or too good to be true. When uncertain, opt for the conventional approach of consulting your financial adviser regarding any opportunities you come across.
  5. In conclusion, stay vigilant to the email communications from Investec that outline various tactics scammers may employ to deceive you. Investec consistently monitors fraud trends that might impact you, and by enhancing your awareness of these, you can effectively safeguard yourself.

This article has been reproduced by courtesy of INVESTEC.

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