Namibia: EFT Phishing Fraud Skyrockets

The banking industry has recorded an increase of N$5,4 million in electronic funds transfer fraud last year from N$194 000 in 2018, said the Bank of Namibia.

According to the central bank, this increase is largely attributed to phishing incidents perpetrated via internet banking platforms and mobile applications.

Phishing is a cybercrime in which a target or targets are contacted by email, telephone or text message by someone posing as a legitimate banking institution to lure individuals into providing sensitive data such as personally identifiable information, banking and credit card details, and passwords.

The perpetrators then use such information to withdraw and transfer funds from the victims' accounts.

In 2015, electronic funds transfer (EFT) fraud was N$565 000, then it increased to N$768 000 in 2016, nosedived to N$528 000 in 2017 and reached a low of N$194 000 in 2018.

Last year the fraud figure reached N$5,6 million, bringing the overall total fraud committed in the banking industry to N$9 million.

Following EFT fraud, is card fraud, which stood at N$3,1 million in 2019 - the lowest in the last five years. In 2016, the value of card fraud reached a high of N$13,4 million.

Cheque fraud has been on a negative slope over the years and recorded a value of N$320 000 last year, from a high of N$3,3 million in 2016.

The central bank said despite the increase in 2019, the total fraud perpetrated within the national payment system remained within the fraud safety index indicator of 0,05% as per the Bank of Namibia's goal, resulting in an actual figure of 0,00089%.

Last year, commercial banks went all out warning their clients against card and EFT fraud.

Capricorn Group's information security specialist, Riaan Viljoen, last year said fraudsters will often pretend to know staff or have access to a bank's inside information.

"It is the act of fraudsters engaging victims in a friendly and helpful telephone conversation, claiming to be from the bank, and offering assistance with a mobile application upgrade or security enhancement. These calls will also have a sense of urgency, for example the fraudster will tell you that your account may be compromised if you do not upgrade it immediately," he said.

Viljoen said this is how victims are coaxed into trusting the authenticity of the caller.

"Victims are then requested to enter information on the mobile application, to share or forward information, or to respond to a text message. Never obey instructions from a random phone call," he warned.

The central bank has said the payments industry will continue monitoring the landscape for any emerging fraud trends, and continue to cooperate with law-enforcement agencies and consumer associations to prevent fraud in the retail payment system.

They have also encouraged customers to be vigilant and immediately report suspicious phone calls and activities.

According to the 2020 Bank of Namibia annual report, N$289 billion was cleared from EFTs in 2019, N$22 billion from cards and N$212 million in cheques.

ETFs and card payments all recorded increases in volumes of transactions and the value when compared to previous years, while cheques continue on a downward trend as a result of the phasing out of cheques as a payment instrument

The increased EFT usage reflects the efficiency and reliability of this payment instrument and affirms the public's confidence therein, said the bank, but the confidence of consumers in this platform has also attracted fraudsters to the game.

Credit card fraud, computer fraud, theft of cash, treasury operation fraud and manipulation of Automated Teller Machines (ATMs) fraud are the most prevalent categories of fraud, said the Bank of Namibia. The features of fraud included fraud committed by outsiders, forgery of authorised signatures, manipulation of accounting and other bank records, and fraudulent proof of payments.

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