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Managing and mitigating your risk as a retiree

Managing and mitigating your risk as a retiree
23-06-22 / Staff Writer

Managing and mitigating your risk as a retiree

Johannesburg - Retirement is a time for you to be enjoying a more relaxed pace of life, spending time with loved ones and friends and enjoying the fruits of your working career.  However, retirees could be at risk of becoming victims of cybercrime fraudsters who are targeting your ‘nest egg’.  

“The reality is that retirees are targets of brazen criminals who will exploit vulnerabilities to get access to retirement savings.  As retirees are no longer economically active, any loss of funds due to a fraudulent scheme can have devastating consequences for their financial security as losses are not easily recoverable,” warns Ann Cloete, Senior Manager: Product, Underwriting & Portfolio Management at Aon South Africa. 

Fraudsters often come across as being genuine, sophisticated, and sincere in their approach, materialising out of thin air to be of assistance during a complex transitional phase. “When reaching your retirement age, there are often large lump sums paid out or monthly retirement fund payments set up to be deposited into your bank account. The fraudsters will either try and get hold of your personal information or your account details to intercept any payments that are being made,” Ann explains. 

Aon provides a few examples of scams being deployed by fraudsters:

Retirement fund or medical aid imposter scam 

The fraudster contacts you pretending to be from your retirement fund administrator or medical aid company, often wanting confirmation of account details to process a payment(s) or to make changes to your policy. The fraudsters have done their homework and will send e-mails from similar domain names or use phone numbers that correspond with your retirement fund administrator or medical aid company.  

Computer tech support 

A fraudster will contact you in the guise of a tech support person calling from your retirement fund administrator to help you set up any Apps that are needed on your computer or mobile device. Note that any bank, retirement fund administrator or medical aid would never ask you to provide personal information such as bank account details and passwords over the phone or via e-mail.

The doting grandparent scam 

The fraudster will call you, pretending to be your grandchild who is in desperate need of financial aid. The scammer will swear the grandparent to secrecy as their parents are not supposed to know about the supposed financial conundrum they got themselves into. 

Phishing scams and social engineering

Phishing involves unsolicited messages (e-mails, SMS, and WhatsApp) to convince you to provide personal information, bank details and passwords by clicking on a link to provide same.  This is often done by means of social engineering where the fraudster uses the identity of someone known to the victim.  

Vishing scams

The fraudsters call you to advise that there is fraud on your account.  They can go as far as sending fake SMS’s and even tell you to call the number back to verify that they are calling from your bank. When you call the number back, it answers as if it is a bank call centre to lul you into a false sense of security to provide your one time pin sent to you by your bank. Once the fraudster has it, they can clear out your bank account.  

Manage and mitigate your risk

“The level of resourcefulness should not be underestimated,” says Ann. “Always regard every message or e-mail that is sent to you, any phone call that you may receive or request from an official with a healthy dose of scepticism. Call your retirement fund administrator, medical aid company or family member back directly to confirm any request made, in order to prevent fraudsters from getting their hands on your personal details.”

If you suspect you’ve been the victim of a scam, get in contact with your bank, medical aid, or retirement fund administrator, immediately. “You generally only have a small window of opportunity in which to attempt to get your money back from suspected fraudsters,” says Ann. 

Aon took the initiative to find a solution to help individuals to protect their funds that is suited to a world where many of us transact online. “The ‘Funds Protect’ solution (brought to you by Phishield UMA (Pty) Ltd and underwritten by Bryte Insurance Company Limited) covers you for loss of funds due to the fraudulent conduct of a third party from an account in your name as a result of a funds transfer that is irrecoverable from your financial institution or a third party. The cover is specifically designed to cover you for funds that are transferred out of your account due to fraud, whether the loss from your account was authorised or unauthorised. It is especially handy if you’ve been duped into making a payment yourself or if someone gains access to your banking details,” Ann explains. 

The cover provided by a personal Funds Protect policy will trigger in the event of:

  • Email interception fraud
  • Transactions due to your stolen identity
  • EFT/deposit scams
  • Hacking /phishing/vishing attacks
  • Demands for ransomware attacks, denial of service attacks, etc
  • Fraudulent invoices
  • Sim Swap fraud
  • EFT Fraud
  • Online banking fraud
  • Online shopping fraud
  • Holiday scams
  • Fake classified adverts
  • Bogus property rentals

“Funds Protect offers a choice of various plans starting from R25 000 up to R1 000 000 cover in order to mitigate your full financial loss. Make sure to purchase enough cover, for example, if you have purchased R25 000 Funds Protect cover but all your bank accounts are accessed, your loss could amount to much more than R25 000 and potentially be financially crippling. Funds Protect cover is relatively inexpensive for what it provides and will be a lifeline in the event of a loss of funds related to your retirement fund,” Ann concludes. 

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