The past few months have created extreme financial pressures resulting in consumers experiencing difficulty in honouring some of their financial obligations. This has in turn created a breeding ground for financial scams taking full advantage of the very difficult situation.
Wesbank has identified two scams and warns customers to stay away from such scammers.
"We regard financial scams as very serious violations of the law and are pro-actively working on creating awareness about such scams through consumer education," George Nyabadza, Wesbank's general manager of marketing said.
Two such illegal scams that WesBank has identified is the so-called Hoola Hooper scam and the Auto Trader Fraud.
This is how they operate.
Hoola Hoopers normally place advertisements in newspapers under the pretext of assisting blacklisted customers and those battling to meet their monthly vehicle repayments to their creditors.
Once contacted by the customer, Hoola Hoopers claim to be representing the bank and promise the customer that they will get a buyer for their vehicle at a price which will settle their obligations towards the relevant financial institution.
The Hoola Hoopers will then proceed to take down all vehicle account details and arrange for the pick-up of the vehicle, which normally takes place in open parking spaces, creating a false sense of security.
At the vehicle exchange meeting Hoola Hoopers will produce an "official agreement" where the customer will fill in all personal details such as their identity number and residential address. It is important to note that vehicle financiers do not condone these practices, and these agreements do not release the customer from his/her obligations to the bank.
Once the exchange has been completed, the customer might get a call from the Hoola Hoopers claiming to have been in an accident or claiming that the car has been stolen. In some cases the Hoola Hoopers do not make any contact with the customer after the meeting.
Needless to say, the vehicle often disappears, or payments are not made into the customer's bank account. Due to Hoola Hoopers using prepaid cellphone numbers, customers are unable to track them and end up with no vehicle and remain obliged to meet their financial obligations to the bank.
According to the Harmful Business Act of 1988, it is illegal to help any credit receiver to breach a credit agreement or to claim to effect the transfer to another person of the right or obligations of a credit receiver under a credit agreement. In addition, any advertising relating to this business practice is also illegal.
l Consumers have also been exposed to fraud originating from advertising their vehicles in the Auto Trader. The fraudster will make contact with the seller, offering them the asking price, in some instances even more, without seeing the vehicle.
The fraudster uses stolen cheques to pay the settlement and normally deposits it just before the bank closes. They then tell the seller that the account was settled and the vehicle has been re-financed by another financial institution.
When the seller phones his bank they confirm that the settlement reflects on the account, and on this basis the seller releases the vehicle to the fraudster.
"Consumers should not release the vehicle until they have confirmation that the funds are cleared and should always check with their bank before signing any agreements or handing their vehicle over to anyone who offers to settle their accounts," said Nyabadza.
He said Wesbank further wanted to advise consumers that regardless of financial institution, to speak to their bank should they anticipate being in financial difficulty which could affect their ability to meet their monthly payments at some point in future.
"We appreciate these are exceptional times and as a result WesBank has invested in special call centres and new methods of assisting customers - who are proactive in contacting us - cope with the strain of their asset finance debt repayments," said Nyabadza.