According to Neville Melville, South Africa's outgoing ombudsman for banking services, Internet banking crime – whereby fraudsters obtain information enabling them to get access to people's accounts and clean them out – has increased by 20% over the past year.
Melville also said that hacking of personal and business computers and mobile phones is increasing at a similar rate.
As more and more South Africans become Internet junkies and use the web to perform business transactions, including banking and shopping, they run the risk of becoming victims of cybercrime, which according to research has become the fastest growing white collar crime in the country.
“The anonymity, which the Internet offers, is a huge advantage for fraudsters and fortune-seekers who have been quick to exploit this opportunity,” Yoav Tchelet, director of Virtui, said.
“Since many businesses on the web exist in virtual space without any brick and mortar address, it is very easy to defraud and vanish,” Tchelet emphasised.
Virtui, a venture capital company that invests in and develops online businesses, has created and developed Trustme.co.za, an online project that verifies the authenticity, legitimacy and trustworthiness of websites.
“While there are numerous forms of cybercrime out there, we focus on consumers who buy through the Internet and often do not know whether a website offering the product is trustworthy and will neither defraud them nor pass on personal information,” Tchelet said.
He said that cybercriminals are taking advantage of the fact that the country lacks a proper legislation to deal with Internet crime, adding that the SA police and judicial system also lack resources and equipment to effectively investigate crimes and successfully prosecute cybercriminals.
A total of 50 international cybercrime experts met during an international conference organised recently by the International Telecommunications Union (ITU) to formalise a formal proposal to create a stronger global movement to fight cybercrime.
“At the moment, cybercriminals see Africa as a safe haven to operate illegally with impunity,” Hamadoun Toure, secretary-general of the Geneva-based ITU, said.
“Cybercrime in Africa and other developing regions will become even worse as broadband technology takes off, allowing criminals to operate more effectively,” Toure warned.
While countless individuals continue to bear the brunt of the ‘side-effects' of the digital revolution, companies around the world are also feeling the heat of fraud.
According to the 2007 PricewaterhouseCoopers' biennial Global Economic Crime Survey, over 43% of the companies interviewed reported suffering one or more significant economic crimes.
The average loss from fraud per company increased nearly 40% in two years from roughly US$1.7million in 2005 to approximately US$2.4 million in 2007, the report said.
The report, which covered 5400 companies in 40 countries, added: “In SA, 72% of companies have fallen prey to economic crime in the past two years.
“No industry is immune from the threat posed by economic crime although different sectors are impacted by different types of fraud.
“It is generally accepted, by criminologists and fraud investigators that three things must be present for a fraudster to set to work: the opportunity to commit fraud, the incentive to commit fraud and the fraudster's ability to rationalise their own actions.”
For more information, go to www.trustme.co.za and www.pwc.com.
