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Insurers face serious risk due to rise in cyberscams



Johannesburg – South Africa is seeing a rise in one of the most financially damaging online crimes, a type of digital scam known as business email compromise (BEC). This is according to Charl Berning, senior forensic manager at Hollard Insure, who says this poses a serious cyber risk for insurers and their customers. 

Many business owners in South Africa rely on email to conduct business – both in their personal and professional capacity – and criminals are increasingly using this platform to scam them out of thousands of rands. But how does it work? 

Berning says criminals are sending email messages that appear to come from a known source making payment requests, and victims fall prey to these scams because the messages appear to be legitimate and trustworthy. 

This illustrates how elaborate and sophisticated cybercrime has become. 

“These syndicates use various methods, including malicious software that can infiltrate company networks and intercept legitimate email threads about billing and invoices,” he says.

“They can also manipulate legitimate email addresses and trick victims into believing that their fake accounts are real. Victims receive messages that look like they’re from a trusted email address, which leads them to reveal very sensitive information, and this is where the trouble begins.”

As the world observes International Fraud Awareness Week this week, Berning cautions South Africans to be very vigilant regarding their emails, because once criminals gain access to your accounts, calendars and data, they can do some serious damage. He also advises South Africans to be extremely cautious when they receive a payment request.

“Cybercriminals can easily intercept emails and insert their own banking details to divert payment to a mule’s account. A mule is someone who either willingly or unknowingly facilitates these illicit payments to be made to their accounts. These individuals are usually people of no means. It could also be an account opened with stolen identity documents. Beware!”.

How can you protect yourself from online scams?

Berning has the following tips: 

  • Ensure you have two-factor authentication on all your devices and apps
  • Don’t share your personal details on social media, and keep your circle small 
  • Only shop from known online providers, on secure platforms
  • Some banks offer an electronic bank card that has a rotating CVV (the three-digit security code on the back) that changes every hour, making it almost impossible for anyone without the card to use it  
  • Be vigilant with all online communications

Business email compromise is gaining ground in South Africa, creating serious risk for insurers and insured parties.

As an insurer, Hollard Insure has zero tolerance when it comes to fraud and financial crime, stresses Berning. 

“We use technology such as advanced data analytics and machine learning to enhance our proactive fraud detection and prevention abilities. Our proactive fraud detection capability functions across the business, and monitors the entire lifecycle of policies [for fraud]”.