Small businesses in South Africa are now being targeted by scammers all over South Africa. In fact, South African small business scams have been rising in the last two years. A local small business owner who specialises in installing and the sale of solar panels, was alerted of the scam as the client(who was scamming him) paid for the goods. Fortunately, his bank made the discovery as the amount was not cleared by them.
The bank found that the scammer emailed them a fake prepared EFT(Electronic Funds Transfer) as proof of payment for the bought items. The payment was not an EFT but a cheque deposit. The small business owner refused to deliver any goods until the payment was cleared, then the cheque bounced a few days later.
As expected, the scammer could not be reached after this event. The only loss to the small business owner was the bank charges of the bounced cheque, which was R180 in total. Learn more about bank fraud in South Africa and prevent yourself from becoming a victim.
The scammers pretend to be interested in the products you sell by asking questions about the business and products. He will then place an order, and this is usually for a large amount. Then payment is made with a fake or fraudulent cheque after receiving the invoice.
An unsuspecting employee of the small business will then confirm the payment by checking the amount of the EFT. Once the payment reflects as a deposit in the bank account, it’s accepted as money received. What no one notices, the money was deposited by cheque and not an actual EFT.
The rest is pretty much the same. The “client” will then phone because they urgently need to pick up the goods or the goods need to be delivered urgently. As soon as the goods are delivered or collected, they disappear. The deposited cheque takes a few days to clear with the bank, by the time the business realises that they’ve been scammed, the “client” is nowhere to be found and can’t be reached via cell or email.
Scammers can also phone to cancel the order, and then demand a refund for the goods bought. Some will even threaten with lawsuits if the money isn’t paid back promptly. The business then refunds the money and only discovers a few days later that the original payment bounced.
In other cases, the scammers will already have the business’s bank details and make a cheque deposit to the business account. They’ll then contact the small business and explain that money was mistakenly transferred into the business account and will need a refund.
There are also scams where they pose a SARS officials. Then explain that they had overpaid a tax return or VAT refund and demand the money to be refunded as soon as possible. Learn how to prevent fraud to prevent any further loss of money.