Digital banking fraud has become one of South Africa’s most pressing financial concerns as criminals exploit the country’s rapid shift to online and mobile banking platforms.

The Banking Division of the National Financial Ombud Scheme of South Africa (NFO) has warned that while digital transformation has improved accessibility for millions of South Africans, it has also created new vulnerabilities that fraudsters are quick to exploit.

Nerosha Maseti, the lead ombud of the NFO Banking Division, said criminals are deploying increasingly sophisticated methods to deceive victims, including phishing, smishing, vishing, impersonation scams, remote-access software, SIM-swap fraud and fake investment schemes.

“Victims often do not realise they are being deceived or that they are not speaking to a genuine bank employee,” Maseti said. “Despite repeated warnings, many consumers believe the caller is legitimate and respond to the urgency created by the fraudster.”

She said victims frequently lose not only the money in their current accounts but also savings, investment funds, unused overdraft facilities and available credit, with the financial and emotional impact affecting entire families.

Understanding liability and bank responsibility

When consumers fall victim to fraud, the NFO’s role is not simply to determine whether a crime occurred, but whether the bank’s conduct contributed to the loss and whether it acted fairly and in line with its legal obligations.

“The key issue is whether the bank acted fairly, reasonably, and in line with its legal and contractual obligations before and after the fraud was reported,” Maseti said.

She warned consumers against relying on social media, internet searches or artificial intelligence for guidance when dealing with fraud, noting that such advice is not always reliable and may lead victims down costly legal routes.

The NFO, established on 1 March 2024, gives consumers a single point of access for complaints involving banks, non-bank credit providers, life insurers and non-life insurers. The service is completely free.

How fraud investigations work

When investigating complaints, the NFO examines account records, transaction data, internet and mobile banking logs, authentication records, device information, one-time password records, audit trails, account notes, correspondence, fraud reports and call recordings.

Maseti said the ombud assesses how disputed transactions were initiated, which devices were used, what authentication methods were applied, and what steps the financial institution took before and after the transactions occurred.

The NFO is well placed to investigate cases where funds are transferred between banks but cannot compel information from independent third-party organisations such as crypto or gambling institutions that fall outside its jurisdiction.

Navigating the financial protection framework

South Africa’s financial consumer protection framework includes several organisations with different mandates. The Financial Sector Conduct Authority (FSCA) acts as a regulator supervising the conduct of financial institutions, whilst the Ombud Council regulates ombud schemes. The National Credit Regulator (NCR) oversees credit providers.

Consumers with disputes involving unauthorised transactions, fraud or other banking matters may approach the NFO at any time, though they are encouraged to first allow the bank an opportunity to resolve the complaint. Criminal conduct should also be reported to the South African Police Service.

A common misconception is that the Ombud Council or FSCA can hear appeals against NFO decisions. They cannot. Consumers who disagree with an outcome may use the NFO’s internal objection and escalation processes or approach a court. NFO decisions are not binding on consumers.

In 2025, the Banking Division of the NFO recovered R53 million for consumers whilst upholding principles of fairness, independence and accountability.

The NFO’s latest 2025 annual report, published in June, is available at www.nfosa.co.za.

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