A new study by South African-founded research platform Yazi has found that 85% of South Africans were affected by fraud in the past year. The study, which gathered 1,234 responses from South Africa and the UK, revealed that one in five South African respondents had lost money to fraud. This is in stark contrast to the UK, where only 7% of respondents reported losing money to fraud. The study highlights the severity of the issue in South Africa.
The study found that 74% of South Africans were aware that AI could be used to clone voices and create fake messages, yet this awareness did not translate to cautious behaviour. Almost half of the scam attempts reported in South Africa began with the promise of making money. The financial consequences of fraud were particularly severe for low-income households, with the median loss amounting to 40% of one month's household income. This suggests that financial pressure may make consumers more susceptible to scams.
The study also found that three-quarters of South African fraud victims recovered none of the money they lost. Furthermore, 64% of those affected believed that bank or institutional staff might be involved in fraud, compared to 17% of affected respondents in the UK. Yazi chief executive Tim Treagus said that the findings suggested that fraud awareness alone was insufficient to protect consumers. He noted that South Africans were not uninformed about fraud, but rather, hope outweighed caution.
The research combined structured survey questions, written responses, voice notes, and AI-moderated follow-up interviews to examine how fraud occurred and its financial and emotional effects. The findings highlighted a gap in trust between consumers and financial institutions. Despite 64% of affected South Africans suspecting bank or institutional staff might be involved in fraud, 47% reported incidents to an institution. Yazi described this as a reporting paradox.
Self-blame was also a barrier to reporting fraud, with 24% of South Africans citing self-blame as a factor, compared to 3% of respondents in the UK. Maya Fisher-French, founder of Maya on Money, said that the findings should concern financial institutions. She noted that the high level of suspicion towards bank staff complicity in fraud was particularly worrying.
The study also highlighted the impact of fraud on businesses, including small and medium-sized enterprises (SMEs), which can face financial losses and risks to jobs and livelihoods. Dewald Müller, head of SaaS and AI at Stitch, noted that businesses whose payment systems were used to move stolen money could also suffer consequences. The report called for stronger fraud prevention measures, including improved detection technology and behavioural monitoring.
The findings suggest that consumer education alone may not be enough to address fraud, with stronger security measures and greater institutional accountability also needed to protect consumers. One participant described the emotional consequences of being defrauded, feeling like they were no longer safe. Another participant reported losing R5,000-R9,999 after being promised investment returns that never materialised. The study's findings emphasize the need for a multi-faceted approach to combat fraud.
Key points
- One in five South Africans have lost money to fraud despite being aware of common scams.
- 64% of affected South Africans suspect bank or institutional staff might be involved in fraud.
- Consumer education alone may not be enough to address fraud, with stronger security measures and greater institutional accountability also needed.
