A new banking scam is doing the rounds that allows criminals to use smart devices and digital wallets to get around OTPs.
Despite banks implementing various fraud detection and prevention measures, such as SIM Swap detection, transaction monitoring, and 2-factor authentication, sneaky crooks continuously find new ways to try and bypass these security systems.
Recently, the Ombud for Banking Services has reported a spike in reports of consumers hit by this particular scam with just one bank reporting almost 5500 cases with combined losses of over R6,5 million.
‘one bank reporting almost 5500 cases with combined losses of over R6,5 million’
The scam takes advantage of near-field communication (NFC) technology and tap-and-go payment systems, which are becoming more popular and common in SA.
Tap and go payment linked to digital wallets work differently to how other card payments work and these crooks have seen the gap and are abusing it before the banks figure out a solve. Unlike typical “card-not-present” fraud, where thieves use stolen card details for online purchases and require a one-time password (OTP) sent to the legitimate cardholder’s phone for each transaction, NFC/digital wallet payments do not require OTPs for every purchase.
