If you’re planning to score a great deal on a new TV, fitness tracker, or air fryer this November, you’re not alone. Cybercriminals will also be on the look-out to take advantage of the shopping rush.
Black Friday 2024 is projected to generate R22 billion in additional retail sales as South Africans eagerly hunt for bargains. This is also a time when credit and account cards are in heavy use. Amid the excitement, it’s essential to shop smart and protect your purchases – and your bank account.
Ernest North, co-founder of Naked, the fully digital insurance platform, shares essential tips for safeguarding your investments and staying safe during the Black Friday frenzy while Leon Jacobs, the chief information officer at RCS, shares advice on how to prevent and minimise the risk of financial fraud.
Smart shopping tips to safeguard your bargains
Ask about the warranty
If you have saved up all year for a new couch or washing machine, you want to know you’ll get years of good use out of it. Check the manufacturer’s warranty, which should offer some protection if the product has a manufacturing defect. Warranties typically range from two years for electronics to five, 10, or even more years for large appliances and furniture. If you encounter a manufacturing fault while your product is under warranty, the item should be repaired or replaced.
Think beyond the bargain
Warranties don’t cover unforeseen incidents such as accidents, fires or theft. This is where insurance fills the gap. By insuring that new laptop, for instance, you’ll be able to claim if it gets stolen during a home robbery. So, add insurance to your shopping checklist, because with just a bit of planning, you can shield your new device or appliance from life’s “what ifs”, so your bargain stays a bargain.
Whether you’re buying in-store or online, you can add items to an existing home contents policy or choose standalone insurance for immediate peace of mind. High-value items that leave the home, such as laptops or bikes, may need individual cover for full protection.
Get it covered as soon as you take possession
Remember to add valuable items to your policy or buy standalone insurance as soon as you take ownership.
For home deliveries: Activate insurance for your new purchase from the delivery date. Retailers typically insure items against damage or theft during transit.
For in-store pickups: If you’re transporting the item yourself, items such as a fridge are typically only covered for up to R5 000 or about 20% of your coverage. Having the store deliver might provide more protection for fragile or expensive items.
Insure for the full value, not the discounted price
Insuring an item at its replacement value, rather than its discounted price, ensures you will receive full value if something unexpected happens. This means you won’t have to compromise on quality should you need to replace it.
Keep track of receipts and other docs
Keeping digital copies of receipts and warranties can make it easier to claim insurance or warranty benefits if something goes wrong. Photograph receipts or store them in a secure app – these can be useful for insurance claims and product warranty support.
Stay vigilant against credit fraud
Credit fraud involves the unauthorised and illegal use of another person’s identity and credentials to access or borrow money, or to use their credit and account cards. This type of crime results in fraudulent debts taken out in your name, which can negatively impact your credit score and affect your future credit applications.
There are several types of credit fraud, including phishing scams, counterfeit card schemes, and identity theft.
Phishing scams are particularly insidious, because they involve fraudsters attempting to obtain your personal information to access your money or credit. These scams are often well crafted and convincing, making it essential to stay vigilant. Be cautious of phishing or vishing attempts through email or phone calls from individuals posing as long-lost relatives, romantic interests, bank officials, representatives of fictitious charities, or debt collectors claiming a deceased family member has outstanding debt.
Fraudsters are adept at using public information to their advantage, so it is crucial to protect your personal details. Never disclose sensitive information online, through messaging apps such as WhatsApp, or over the phone without proper security verification.
Counterfeit card fraud is another prevalent type of credit crime. In these cases, criminals swap out or intercept your card, using the data from the magnetic strip to produce counterfeit versions. This can lead to unauthorised transactions and significant financial damage.
Personal information theft can occur when criminals gain access to cards, driver’s licences, account numbers, usernames, and passwords – whether through physical theft or phishing scams. Stolen information can be used to open bank accounts, set up bill payments, and make purchases online.
The surge in online shopping and bill management around this time of year increases the risk of exposure to advanced fraudulent activities. “So, preventing and minimising the risk of financial fraud is important,” says Jacobs.
According to Jacobs, staying proactive is key to outsmarting criminals and protecting your finances. “Taking these security measures to heart will protect against fraudsters, while empowering you with practical fraud preventative knowledge for safe usage.”
To safeguard your financial health, Jacobs advises consistent vigilance and attention to transactions, both online and offline. Carefully review your bank statements for unauthorised or suspicious activity and report any anomalies promptly.
Not receiving an issued card in a timely manner could indicate that it has been intercepted and used for counterfeit card creation.
One crucial red flag to watch for when applying for credit is being asked to make a deposit – a clear indication of potential fraud.
If you experience any of the following, immediate reporting is necessary:
- Your card is lost or stolen.
- You receive a transaction notification for a purchase you did not make.
- An unexpected one-time password (OTP) is issued without initiating a transaction.
If you fall victim to credit fraud, your first step should be to contact your card issuer. Reporting the suspicious activity allows your issuer to initiate an investigation and freeze your card if needed. Additionally, report the fraudulent activity to local authorities, such as the Southern African Fraud Prevention Service (SAFPS) or Whistle Blowers (Pty) Ltd.
For further security, consider adding a fraud alert to your credit file to authenticate your identity or implementing a security freeze to prevent new accounts from being opened in your name.
RCS provides these tips on how to avoid credit fraud:
- Review and assess your monthly account statements thoroughly to keep an eye on transactions.
- Make sure you’re transacting on secure websites when using your card.
- Check your browser’s navigation bar. Secure and legitimate websites start with https://
- Ensure social media sites you engage with are Meta verified (blue verification badge).
- Always check that you’ve received your card back after making a purchase.
- Do not disclose the following to anyone: your passwords, PINs, OTPs or CVVs (the three- or four-digit number, usually located on the signature panel on the back of your cards).
- Report lost or stolen cards immediately.
- Keep transaction slips to check against your statements.
- When transacting at an ATM, keep an eye on the card slot to make sure your card is not skimmed or replaced.
