Mauritius Faces Increasing Financial Fraud as Digital Scams Emerge

Mauritius, known for its stable economy and reputation as a financial hub in the region, is unfortunately attracting undesirable elements that exploit weaknesses in the system to perpetrate economic and banking fraud.

This article explores the various types of financial fraud that are becoming more prevalent in Mauritius, the reasons behind this troubling trend, and the precautions that can be taken to avoid falling victim.

In a financial context, “skimming” refers to the illegal practice of collecting credit or debit card information fraudulently.

Recently, several cases of skimming have been reported at a limited number of ATMs in Mauritius.

In response, the Mauritius Bankers Association (MBA) has issued a warning urging banking customers to remain vigilant.

Fortunately, these incidents were detected rapidly and reported to the police, who managed to apprehend the suspects involved.

Affected cards were deactivated and are currently being replaced.

Although skimming is a relatively new form of financial fraud, Mauritius is grappling with a broad spectrum of emerging scams that continue to gain traction.

Aamish Beedassy, a compliance expert in financial crimes and data protection, notes that different types of fraud are prevalent in the country, mirroring global trends.

He explained, “Fraud must be seen as a scheme designed to deceive, falsify, conceal, and steal.

It is a calculated process that allows fraudsters to make quick financial gains while operating anonymously or under a fictitious identity.”

In addition to the evident socio-economic factors driving fraud, a significant contributor to its rise is the increasing technological or digital activity.

“The ability to operate under a fictitious or anonymous identity facilitates fraud.

Insufficient security measures, interconnected global financial systems, and technological advancements allow scammers to execute cross-border transactions more easily.

Unfortunately, a lack of awareness or victim naivety further enables these scams,” he emphasized.

Common Types of Fraud

1. Phishing: According to Hafeez Toofail, a financial services expert, phishing is one of the oldest forms of financial fraud. “Criminals send emails, texts, or make phone calls to lure victims into divulging personal information such as card numbers, passwords, or banking information.”
2. Investment Fraud: Toofail also discussed investment scams where fraudsters offer investment opportunities with promises of high returns with minimal risk. A notorious example is the Ponzi scheme, involving false promises of substantial returns on investments.
3. Phone Scams: These scams frequently occur during festive seasons, where victims are convinced that they will receive gifts from abroad.
4. Many individuals reported being contacted by phone or text that informs them they will receive a package containing valuable items, such as smartphones, and that they need to pay delivery fees.
5. Unfortunately, some have lost over Rs 100,000 only to realize they have been deceived.
6. Insurance Fraud: Beedassy highlighted the rise of insurance fraud, involving submitting false claims or inflating damages to obtain compensation from insurance companies.
7. Tax Fraud: This illegal practice encompassed individuals or businesses attempting to reduce their tax burden or evade taxes by concealing or falsifying information.

The Dangers of Skimming

Beedassy clarified that skimming is a broad term encompassing various forms of financial crimes, particularly related to identity theft.

“In the banking context, it is referring to the method used by fraudsters, especially identity thieves, to capture personal banking information from credit or debit cardholders.”

At ATMs, the scammer typically focuses on stealing identity or banking data, which is then misused to conduct fraudulent transactions.

The dangers for ATM users include money theft, where a fraudster can drain a victim’s bank account by making withdrawals or online purchases using a cloned card.

This theft is adding to the victim’s challenges, who must spend time reporting the incident to the police and bank to replace the card.

Understanding the Surge in Financial Fraud

Didier Samfat, a cybersecurity and network consultant, stated that the rise in financial fraud is largely attributed to the allure of easy money and the increasing digitization of payment services.

With the growth of online transactions and the widespread use of ATMs, criminals are seeing opportunities to exploit security gaps.

Moreover, the advanced technologies used by hackers are readily accessible online, making these attacks harder to detect and prevent.

Precautionary Measures to Avoid Falling Victim

Experts recommend that individuals utilize ATMs located in secure areas, such as within bank premises.

To prevent skimming, users should always inspect ATMs for suspicious devices, such as poorly attached keypads or irregularities in card readers.

If you encounter any doubts, it’s best to change to a different ATM.

When entering your PIN, shield your entry with your hand to prevent cameras or prying eyes from viewing it.

For online fraud, be wary of offers that seem too good to be true.

Never click on links or open attachments from unsolicited emails or messages. Ensure websites are secure, indicated by “https” and a padlock symbol in the address bar, before entering personal information.

Enable two-factor authentication (2FA) on online accounts for added security.

These simple precautions can help protect you from fraudulent attempts and secure your digital accounts.

In Case of Fraud, Follow These Steps

If you fall victim to financial fraud, cybercrime and financial services experts advise taking the following steps:

1. Immediately contact your bank to block your card, report unauthorized transactions, and follow their guidance to protect your accounts and personal information.
2. File a complaint with the police to initiate an official investigation.
3. Report the incident to the Cyber Emergency Response Team (CERT-MU), the Mauritian government agency responsible for centralizing cybersecurity incidents and providing solutions to the public.
4. Informing CERT-MU will help protect your assets and assists in preventing further fraud by enabling better coordination and response to cyber threats.

Bank Statements: ATM Safety Reminders and Education Initiatives

The SBM Bank has reassured customers that its ATMs have not been targeted by skimming attempts.

They also highlighted the importance of not sharing misleading videos and messages, reminding the public that dissemination of false information may violate current laws.

Meanwhile, the Bank of Mauritius (BoM) is launching a new financial literacy program next week aimed at educating Mauritians about financial risks, including skimming and other types of scams.

Hemlata Sadhna Sewraj-Gopal, Second Deputy Governor of BoM, stated, “We aim to inform the population about the risks and precautions they should take.”

She also emphasized that the situation is currently under control, with all banks alerted and implementing measures to protect their clients.

Source: Defi Media