Thursday 16 July 2009

Don't trust strangers with your money

We’re beginning to have some success combating scammers. Not a huge amount but it’s a start.

We were recently contacted by a consumer who received an email entitled “Important Alert:Your InterSwitch Nigeria Account”. The email went like this:

“Dear InterSwitch Customes,
InterSwitch Nigeria Public Announcement. This message is sent from InterSwitch ATM CARD Banking Secure Server to verify and secure your Online Banking service. Your access to ATM CARD banking has been suspended temporally for security reasons by InterSwitch Nigeria. All information entered must be accurate and correct for your ATM CARD access to be re-activated. You must activate and verify your ATM CARD Account to have access to all ATM MACHINE”

The email then contained a link to click on which would supposedly allow you to “verify” your account.

The spelling is always a good start with an email like this. For some strange reason scammers don’t seem to know how to spell-check their emails. No real bank would issue an email like this containing such bad English. Then of course there is the other obvious clue. This customer didn’t even have a bank account in Nigeria. The link in the email is now unavailable but I wonder how many people clicked and opened a form that demanded their personal banking details.

Luckily this consumer was smart enough to realise that this was a scam. I hope everyone else also knows that no bank ever contacts you this way. Only a crook does this.

We had another email recently from a consumer who hadn’t been so fortunate. Not a phishing scam like the Nigerian bank, this was much more direct. He said:

“My partner received a call from ProKard who offered a membership card from Protea Hotels in RSA that entitles the cardholder to discounts on meals, accommodation, car rentals etc. All this was going for R1,090 or P900. She asked about the payment terms and was told that she could deposit into their account in manageable instalments. She was then asked for her debit card number and when she asked why it was needed she was told that it was just for their records and they were adamant that it was not for payment of the subscription. Barely 15 minutes later her account had been debited with P1,013.59 and when she enquired with the bank she was told that ProKard had debited her this amount.“

This is outrageous. It’s also a deception. If what you say is true then it’s also illegal. However, I hope your partner has now learned a valuable lesson about giving out your details like this to strangers.

It’s also not the first time Prokard have been criticised for their conduct. You can quickly find a very large number of complaints on South African web sites about their approach and many of them are similar to this experience. It reminds me of certain holiday clubs that seduce people into their schemes and then they have people captive, after they’ve got their hands on their victim’s money.

I suggest that you contact Prokard and formally complain about their conduct and instruct them that the payment was unauthorised and based on a deception. I also suggest you contact your bank and tell them the same thing.

The lesson from this case is NEVER to give your card details over the phone unless you are 100% certain that you can trust the people you are talking to. Another lesson is not to trust telemarketers, the sort of people who call you like this.

We’ll also get in touch with Prokard and see what they have to say for themselves. Maybe they’ll respond properly to this complaint and remedy the situation. We’ll see.

The bigger lesson is to distrust part of this whole industry. Of course there are perfectly respectable loyalty schemes that are issued by companies like airlines who give you air miles or points based on how often you fly with them. There are also loyalty schemes run by hotel chains that work the same way. Every time you stay with them you get points and eventually you get something in return. The critical thing is that these schemes are free. The Prokard scheme is not free. You give them over R1,000 just to join. Only then do you get some cheap hotel stays.

I saw an explanation from Prokard on why they charge a fee to join and it went like this:

“Prokard is our unique loyalty programme, giving our members access to various exclusive offers and benefits. The membership fee ensures commitment from frequent travellers to utilise our properties. A complimentary membership will simply devalue our Loyalty Club.”

Roughly translated that means “We get people’s money so they feel obliged to buy plenty of slightly discounted stays in our already over-priced hotels so they can try and get some of their money back.”

Here’s a free tip from Consumer Watchdog. If you want to stay in a hotel in South Africa use the Bid2Stay web site ( instead. There you actually offer the hotel of your choice what you are prepared to pay and they can take your offer or leave it. Get your offer right and you can save a small fortune. I’m not exaggerating but I personally have saved thousands over the last couple of years this way.

Before you ask, no you DON’T have to pay anything up front. And no, I’m not a Bid2Stay shareholder.

Yet again the lesson is to be sceptical. Don’t trust strangers with your money and don’t give it away over the phone. Strangers who offer you something intangible over the phone in return for your cash simply can’t be trusted.

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