'I'd never felt so cheated, so defrauded in my life' - phishing, pyramid schemes and other scams to look out for

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  • From credit theft and Internet fraud to fake charities and get-rich-quick schemes, we lose millions of rand to scams every year.
  • Phishing, skimmed credit, pyramid schemes and Bogus modelling recruitment are among the popular scams to look out for.
  • The sad thing is con artists don’t just take away our money but take away our empathy too.

When the tsunamis hit South Asia and Japan, every soul worldwide was shocked out of their slumber and into a frenzy of charity. Newspapers, TV and radio stations opened special funds for readers and viewers to contribute to.

Never in the history of humankind has there been such a show of public generosity, as dollars, pounds and rands poured in from around the world to help the survivors devastated by the disasters.

Unfortunately, there was a lot of insincerity going around as well. Besides companies that insisted on receiving media attention in exchange for their contributions, there were keen-minded entrepreneurs who saw the unprecedented generosity as a golden opportunity to make a quick buck.

They duped volunteers who believed they were serving the cause into making door-to-door collections and pocketed thousands from the generous and unsuspecting. It’s not the first time people got a warm, fuzzy feeling out of being conned. Con men have been making rounds in the name of religious schools, the destitute and the poor for decades, relieving people of millions every year.

They usually go undetected, too, because few people have the gall to question someone who appears to be acting out of such pure selflessness.

Take Lebohang, for instance. She used to donate to any charity that bothered asking her for a contribution and hardly ever insisted upon receipts because she had faith in the basic good of people. But when she was conned out of R300 in a tsunami aid scam, she realised her error.

“I dropped the money into the collection bin of a guy standing on the corner at a bank near where I live,” says Lebohang.

“He said he represented a religious body that was collecting money for the victims. I was in a hurry but was eager to help the families in any way I could. I didn’t ask anything else, gave him my donation, and went to my car,” she adds.

Two days later, Lebohang read a newspaper report about phoney charities and thought about the man on the corner. With a sinking gut, she looked up the religious body he mentioned and found that it didn’t exist.

“I’d never felt so cheated, so defrauded in my life,” she says. “I think using the victims of such a disaster to con people is the most disgraceful scam someone could possibly dream up, and I hope the people who were behind it rot in hell.”

Lebohang has joined an ever-growing list of sceptic donors who used to give without thinking but now think without giving.

READ MORE | We have Tinder Swindlers among us in South Africa – expert tips on how to spot red flags

How to spot fake charities

If you’re trying to figure out if you’re dealing with a con trying to present itself as a worthy cause, ask the following questions:

• Is it a registered society or organisation? Insist on being shown the registration documents, so you can verify its authenticity.

• Is the fundraiser knowledgeable about the organisation? Real volunteer workers will know everything there’s to know about the cause before lending their energy and effort to it. If it’s fraudulent, a few well-chosen, well-spoken questions will soon expose it.

• Do they seem pushy? Real charities sell themselves and don’t need someone else to do it for them.

Generous people are aplenty but every time they get conned it becomes harder to convince them to step forward for genuine causes. Con artists don’t just take away our money. They take away our empathy, too, and that’s a real pity because today’s world really needs all the compassion it can get.

Here are a few common scams to look out for:

1. Phishing: of scammers and spammers

One new swindle technique that uses the low-cost power of the Internet to good effect has been dubbed ‘phishing’. Phishing scams involve fake emails that are sent to thousands of users under the supposition that at least some of them must be customers of a certain bank.

Genuine customers who fall for the scam are either redirected to a fake website that looks very much like the real thing or are asked to submit information such as their account details and passwords straight into the forms in these emails – and voilà! You’ve just given away access to either your credit card or Internet-banking facility.

In a matter of minutes, your bank account is zeroed, and your credit card is maxed.

“I consider myself lucky,” says Nokuthula, a 25-year-old web designer who fell victim to one such a phishing scam.

“I only had a couple of hundred left in my bank account, and my credit card was close to its limit anyway. So, they didn’t get much,” she says.

The international Anti-Phishing Working Group estimates that fake emails get a response rate of about five percent from Internet users, leading to credit-card fraud, identity theft and drained bank accounts.

Tracking down and nabbing the culprits behind these phishing scams is difficult because they could be operating from anywhere in the world.

Nokuthula reported the incident to her branch but there wasn’t much else she could do. Since then, she’s stopped banking via the Internet completely and has cancelled all her credit cards.

“What technology can do these days is scary,” she says. “At least before, con men had to take your ATM card or something before they could get to your money. These days, they don’t even need that,” she says.

Keep in mind that financial institutions will never ask for your personal information by email. In fact, they rarely get in touch with you about your accounts via email at all. If they do, it will be through your Internet banking account email and no other.

The best thing to do if you receive an email from your bank is to call them up and verify its authenticity and forward it to them so they can conduct an investigation.

2. Skimmed credit

With most banking cards becoming chip-based around the world, card fraud has become a lot more difficult because the devices required to read the information stored on these chips are much harder to come by.

However, even with just your 16-digit card number, four-digit expiry date and the other three-digit number found on the back of your card, fraudsters can make several Internet transactions without your knowledge. (Well, you will find out eventually… when the bill arrives!)

But where do they get this information from?

Quite simply, whenever you give your card to someone, they have the opportunity to lift all this information off it before giving it back to you. At hair salons and restaurants, in particular, employees are alone with your card for whole stretches of time while they wait for approval.

“I thought my bank did a great job when they detected a suspicious purchase over the Internet and called me to verify it,” says Kgomotso, a 24-year-old events organiser.

“They cancelled my card and sent me a new one immediately,” she says.

Kgomotso used to get calls like that from her bank twice a year. But ever since she received her chip-based credit card, she has not received a single call. But that doesn’t mean she’s not careful.

“I never let anyone take my card out of sight. “Even at restaurants, I always insist on paying at the cashier on my way out rather than them bringing me the bill,” she explains.

READ MORE | 8 expert tips to surviving South Africa’s rising cost of living

3. Collapsible pyramids

Pyramid schemes never seem to go out of fashion, no matter how tired the idea gets. People find ingenious ways of putting new spins on a centuries-old scam and continue cheating old people of their life savings and young people of their salaries.

Sometimes also labelled as multi-level marketing schemes, pyramid schemes are easily identifiable, and there are few people who have not fallen for at least one type in their lifetime.

First, you have to pay an upfront joining fee to get in. Sometimes, this joining fee is disguised as administrative charges or maybe it’s the security deposit you’ve got to cough up before you’re allowed to take some stock of the stuff you’re supposed to sell.

In any case, the fee can range anywhere between a few hundred to a few thousand. Some so-called legit schemes don’t even ask for upfront payment. They just concentrate on recruitment, don’t pay you anything (apart from the commission you earn selling the products) but require you to dedicate most of your life to your work.

“We reported to the office at 07:00 every morning,” recalls Reneilwe, 23, about her experience with one pyramid scheme.

“First, there was a roll call, then a ‘manager’ pumped us up and got us ready for the day. At 09:00 we hit the streets, lugging boxes of stuffed toys or books around with us all day. We bore all costs including transportation, food and pilferage.

“We sold to anyone – people on the street, people having lunch, at offices, factories and even police stations. We walked and pitched all day and at about 18:00 went back to the office. More roll call, pitch practising and motivation. Finally, at 21:00, they let us go home. Because competition was stiff,” she explains.

Reneilwe had to travel several hundred kilometres away every day to find ‘virgin’ markets.

“The 20 of us could canvass the whole city in three days. “After that, you’ve got to decide. Pay for a bus trip out of town or starve because no-one will want to see another girl selling a stuffed monkey in your area,” she adds.

Pyramid schemes don’t sell products, they sell dreams: early retirement. The idea is to work hard at getting other people to sell the stuff for you so that you can just sit back and enjoy overriding commissions.

Pyramid schemes always focus on recruiting members – not selling the products. So, before you sign that dotted line or make that bank transfer, think long and hard about what it is you’re getting into. It’s easy to not get cheated. Just remember that if it’s too good to be true, it probably is.

4 Bogus modelling recruitment

Traditionally, this scam is always aimed at young girls, teenagers and college students because they sell a dream like no other: you could be a star.

Dineo, a fashion writer, and her friend were approached by two women in Sandton a few months ago and asked if they’d be interested in becoming models. Like any red-blooded woman, Dineo said yes and gave them her number.

“I completely forgot about them after that,” recalls Dineo.

“But one week later, we got a call, and they arranged a so-called ‘appointment’ for us a couple of days later. It was supposed to be like an audition, I think. We were very excited, naturally, and traipsed over to the interview looking our best,” she adds.

But nothing was what they expected over there. The address they were directed to was a business centre (used by people who need instant, temporary offices in a hurry), and outside the door was this note: “If you’re here for the talent casting session, please call this number.”

“That was suspicious enough, I guess,” she admits. “But we called the number anyway and a lady opened the door.”

Once inside, they were asked to wait their turn (after 15 other girls!) in a sort of pantry. One of them was quite friendly and approached Dineo and her friend. She warned them to “read what you sign very carefully”.

Apparently, girls are seduced into signing contracts for ‘grooming classes’ with the company. But while the grooming classes themselves are free, the makeup is not: they’re asked to buy between R1 400 and R3 000 worth of branded makeup before they can start their training - and there’s still no guarantee that you’ll become a model.

“I’ve met many models in my career as a fashion writer, and there’s one thing they always tell me: never trust a talent agency that requires you to pay upfront,” says Dineo.

When it was her turn, Dineo asked the two women interviewing her if she could use her own makeup. Their answer was no, buying the makeup from them was a pre-condition to signing the contract.

“But that’s not all,” warns Dineo. “Apparently, if you sever the grooming contract before it’s due, there is a R2 000 penalty.”

Dineo was lucky to have been warned by a previous victim but the other 15 girls she saw there weren’t. She advises to be very wary of people who approach you with talk about you becoming a model.

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