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Why we get scammed

Con artists have been plying their trade since time immemorial, but the internet opened the floodgates to a whole new level of swindling. It has allowed fraudsters to take aim at an endless number of victims and at the range of victims that they never could have reached before.

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And with the wide spectrum of our personal information accessed via the internet, everything falls into the scammer’s lap even more easily, says Carey van Vlaanderen, CEO at ESET Southern Africa.

In one sense, however, old is still gold. The success of an online con, including phishing (the most pervasive of such scams), hinges largely on human psychology. More precisely, it all tends to boil down to how well the con artist can exploit some of the very things that make us human. And those haven’t undergone much change in, well, quite a while.

Instead of crafting special code and laboriously overcoming technical defences, “hacking the human” is generally recognised as the easiest way to steal personal data or money online.

Despite – or perhaps thanks to – some obvious limitations in terms of physical propinquity when it comes to online space, romance scammers can build rapport with victims nearly at (ill) will. As with a genuine online relationship, it won’t probably be love at first sight and the grooming of the “mark” may take quite some time. However, once the “romance” finally blossoms, it’s easy enough to take things to the next level – to part the beguiled from their money.

Several forces shape, or contribute to, a potential victim’s susceptibility to this fraud. For one thing, we flock to dating sites in search of romantic relationships, which may leave us somewhat predisposed to building attachments with other people and to taking for granted the good faith of the prospective partner. Of course, scammers also prey on users of social media where social interaction is often the reason to be there in the first place.

The sense of a perceived bond also leads to some degree of dependence, as does the need for approval from our (apparent) love interest. And when the “soulmate” tugs at our heartstrings with an urgent request to help foot the treatment bill for their child, who suddenly turns out to be hooked up to hospital monitors, is also where our empathy and sympathy really kick in.

Other schemes aim to appeal to our desire for something less noble than everlasting love. All of us have probably been “blessed” with an email that promised a fortune in exchange for what is typically an upfront fee that, when you think about it, seems truly miniscule compared to the “riches” awaiting you. It could take any number of forms, such as a Nigerian prince scam or a lottery scam. However, all of them ultimately seek to take advantage of our desire for enrichment.

If you’re like most people, you’ve probably stopped to think at least once about what all those zeroes in the promised money could buy. Arguably, it may not always be easy to think straight when faced with the opportunity to, once and for all, escape the daily schlep. This is doubly true when the offer adds other ingredients to the mix. It will be uniqueness (you, not your neighbour or mother-in-law, received the offer); scarcity (the “supply” is limited); and urgency (the time to act is, well, yesterday).

And, perhaps just as importantly: what if – despite all the red flags urging you to run the other way – the opportunity is genuine, as that nagging feeling tells you?

Complicating things further, if you do succumb, it’s not over for you – and certainly not for the scammer. Instead, you’re likely to face more requests for additional and ever higher “processing fees”, bribes, and so on. You may well find the pleas increasingly difficult to resist, for which you can blame your hardwired reluctance to admit to a bad decision and give up hope, or a cognitive bias known as sunk-cost fallacy. Or, like a hapless gambler, you will continue to “invest” money to recoup your losses. But the house always wins.

The need to “act now or all hell will break loose” is a staple in phishing campaigns, which aim to trick us into divulging login credentials, and in other scams tricking us into installing malware. Knowing that rushing you into acting immediately is likely to cloud your judgment, fraudsters go all out in their attempts to invoke a false sense of urgency.

It’s only natural that we feel compelled to act swiftly: we don’t want anybody to mess with our bank or email accounts, which is exactly what the “alert” or “notification” is likely to be about. The sense of apprehension can be enough to distract us from the warning signs about something being amiss that might otherwise not escape our attention.

We’re mostly conditioned to obey authorities, and it is this respect for, and perceptions of, authority that phishers turn against us in their attacks. They let the presence of authority cues and our adherence to social norms do the heavy lifting for them.

By impersonating police, the taxman or another trusted authority or entity such as a bank, online payments provider or email service provider, the phishers will try to instruct us to act on pain of facing some unwanted, and usually dire, consequences. Like the sense of immediacy, when we’re gripped by fear or panic, our ability to think critically may give way to impulsive actions.

While this (over)confidence can be helpful in many situations, it can also skew the perceptions of our own strengths and weaknesses, leaving us vulnerable in the “knowledge” that “it cannot happen to me”. Ultimately, it may also help explain why some people fall for phishing campaigns, and why they do so repeatedly. Verizon’s Data Breach Investigations Report recently claimed that “the more phishing emails someone has clicked, the more they are likely to click in the future”.

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Online retail gets real

After decades of experience in selling online, retailers still seek out the secret of reaching the digital consumer, writes ARTHUR GOLDSTUCK.

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It’s been 23 years since the first pizza and the first bunch of flowers was sold online. One would think, after all this time, that retailers would know exactly what works, and exactly how the digital consumer thinks.

Yet, in shopping-mad South Africa, only 4% of adults regularly shop online. One could blame high data costs, low levels of tech-savviness, or lack of trust. However, that doesn’t explain why a population where more than a quarter of people have a debit or credit card and almost 40% of people use the Internet is staying away.

The new Online Retail in South Africa 2019 study, conducted by World Wide Worx with the support of Visa and Platinum Seed, reveals that growth is in fact healthy, but is still coming off a low base. This year, the total sale of retail products online is expected to pass the R14-billion mark, making up 1.4% of total retail.

This figure represents 25% growth over 2017, and comes after the same rate of growth was seen in 2017. At this rate, it is clear that online retail is going mainstream, driven by aggressive marketing, and new shopping channels like mobile shopping. 

But it is equally clear that not all retailers are getting it right. According to the study, the unwillingness of business to reinvest revenue in developing their online presence is one of the main barriers to long-term success. Only one in five companies surveyed invested more than 20% of their online turnover back into their online store. Over half invested less than 10% back.

On the surface, the industry looks healthy, as a surprisingly high 71% of online retailers surveyed say they are profitable. But this brings to mind the early days of Amazon.com, in 1996, when founder Jeff Bezos was asked when it would become profitable.

He declared that it would not be profitable for at least another five years. And if it did, he said, it would be in big trouble. He meant that it was so important for long-term sustainability that Amazon reinvest all its revenues in customer systems, that it could not afford to look for short-term profits.

According to the South African study, the single most critical factor in the success of online retail activities is customer service. A vast majority, 98% of respondents, regarded it as important. This positions customer service as the very heart of online retail. For Amazon, investment back into systems that would streamline customer service became the key to the world’s digital wallets.

In South Africa online still make up a small proportion of overall retail, but for the first time we see the promise of a broader range of businesses in terms of category, size, turnover and employee numbers. This is a sign that our local market is beginning to mature. 

Clothing and apparel is the fastest growing sector, but is also the sector with the highest turnover of businesses. It illustrates the dangers of a low barrier to entry: the survival rate of online stores in this sector is probably directly opposite to the ease of setting up an online apparel store.

A fast-growing category that was fairly low on the agenda in the past, alcohol, tobacco and vaping, has benefited from the increased online supply of vapes, juices and accessories. It also suggests that smoking bans, and the change in the legal status of marijuana during the survey, may have boosted demand. 

In the coming weeks, we can expect online retail to fall under the spotlight as never before. Black Friday, a shopping tradition imported “wholesale” from the United States, is expected to become the biggest online shopping day of the year in South Africa, as it is in the USA.

Initially, it was just a gimmick in South Africa, attempting to cash in on what was a purely American tradition of insane sales on the Friday after Thanksgiving Day, which occurs on the third Thursday of November every year. It is followed by Cyber Monday, making the entire weekend one of major promotions and great bargains.

It has grown every year in South Africa since its first introduction about six years ago, and last year it broke into the mainstream, with numerous high profile retailers embracing it, and many consumers experiencing it for the first time. 

It is now positioned as the prime bargain day of the year for consumers, and many wait in anticipation for it, as they do in the USA. Along with Cyber Monday, it provides an excuse for retailers to go all out in their marketing, and for consumers to storm the display shelves or web pages. South African shoppers, clearly, are easily enticed by bargains.

Word of mouth around Black Friday has also grown massively in the past two years, driven by both media and shoppers who have found ridiculous bargains. As news spreads that the most ridiculous of the bargains are to be had online, even those who were reticent of digital shopping will be tempted to convert.

The Online Retail in SA 2019 report has shown over the years that, as people become more experienced in using the Internet, their propensity to shop online increases. This is part of the World Wide Worx model known as the Digital Participation Curve. The key missing factor in the Curve is that most retailers do not know how to convert that propensity into actual online shopping behaviour. Black Friday will be one of the keys to conversion.

Carry on reading to find out about the online retailers of the year.

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Reliable satellite Internet?

MzansiSat, a satellite-Internet business, aims to beam Internet connections to places in South Africa which don’t have access to cabled and mobile network infrastructure, writes BRYAN TURNER.

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Stellenbosch-based MzansiSat promises to provide cheap wholesale Internet to Internet Service Providers for as little as R25 per Gigabyte. Providers who offer more expensive Internet services could benefit greatly from partnering with MzansiSat, says the company. 

“Using MzansiSat, we hope that we can carry over cost-savings benefits to the consumer,” says Victor Stephanopoli, MzansiSat chief operating officer.

The company, which has been spun off from StellSat, has been looking to increase its investor portfolio while it waits for spectrum approval. The additional investment will allow MzansiSat’s satellite to operate in more regions across Africa.

The MzansiSat satellite is being built by Thales Alenia Space, a French company which is also acting as technical partner to MzansiSat. In addition to building the satellite, Thales Alenia Space will also be assisting MzansiSat in coordinating the launch. The company intends to launch the satellite into the 56°E orbital slot in a geostationary orbit, which enables communication almost anywhere in Africa. The launch is expected to happen in 2022. 

The satellite will have 76 transponders, 48 of which will be Ku-band and 28 C-band. Ku-band is all about high-speed performance, while C-band deals with weather-resistance. The design intention is for customers of MzansiSat to choose between very cheap, reliable data and very fast, power-efficient data. 

C-band is an older technology, which makes bandwidth cheaper and almost never affected by rain but requires bigger dishes and slower bandwidth compared to Ku-band connections. On the other hand, Ku-band is faster, experiences less microwave interference, and requires less power to run – but is less reliable with bad weather conditions.

MzansiSat’s potential military applications are significant, due to the nature of the military being mobile and possibly in remote areas without connectivity.  Connectivity everywhere would be potentially be life-saving.

Consumers in remote areas will benefit, even though satellite is higher in latency than fibre and LTE connections. While this level of latency is high (a fifth of a second in theory), satellite connections are still adequate for browsing the Internet and watching online content. 

The Internet of Things (IoT) may see the benefits of satellite Internet before consumers do. The applications of IoT in agriculture are vast, from hydration sensors to soil nutrient testers, and can be realised with an Internet connection which is available in a remote area.

Stephanopoli says that e-learning in remote areas can also benefit from MzansiSat’s presence, as many school resources are becoming readily available online. 

“Through our network, the learning experience can be beamed into classrooms across the country to substitute or complement local resources within the South African schooling system.”

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