Ricochet News

Identity theft ranks top as major contributor to fraud: Expert

MARCH 6, 2017
Identity theft ranks top as major contributor to fraud: Expert

In the personal loan sector, impersonation or identity theft is the number one contributor to fraud with men between the ages of 28 and 40 being the primary targets. This is followed by credit card transaction dispute and phishing fraud.

“More and more South Africans are losing money due to identity fraud and the clever execution of the fraud often makes it very difficult to detect,” says Alfred Ramosedi, Executive for Sales and Marketing at African Bank.

The South African Fraud Prevention Service (SAFPS), say identity theft in South Africa has in fact increased substantially over the last six years.  “Last year alone, we saved the banking industry R1.7 billion based on accounts that were declined as a result of a listing at the SAFPS,” says SAFPS’ Manie Van Schalkwyk. 

SAFPS confirm that the scale of the identity theft is rising as more and more transactions are done electronically. “The problem is that victims usually only discover that they were the victims of identity theft once they are negatively listed for for non-payment of accounts opened in their names or once their credit or loan applications are rejected,” says Van Schalkwyk.

ID theft normally starts with a stolen or lost ID book. The victim’s photograph is usually replaced with that of the fraudster who is doing the impersonation. “Armed with a fraudulent ID book, fraudulent bank statements etc. they can apply for loans, take out contracts or even open fraudulent bank accounts,” says Ramosedi.

While the theft of identity won’t cost you in the short term, it is the long-term cost that needs to be factored in. “You have to be removed from being blacklisted by credit bureaux, prove that the transactions weren’t yours and in some instances even change your identity number,” explains Ramosedi.

Ramosedi says criminals are extremely resourceful and will resort to any measures to get one’s personal information and once they set up a fake ID, they look like they are transacting as a legitimate person.

In order to safeguard yourself from identity fraud here are some useful hints and tips to follow:

  • Do not carry unnecessary personal information in your wallet or purse.
  • Do not disclose personal information such as passwords and pins when asked to do so by anyone via telephone, fax or even email.
  • Do not write down pins and passwords and avoid obvious choices like birth dates and first names.
  • Do not use internet cafes or unsecure terminals (hotels, conference centres etc.) to do your banking.
  •  Do not be a victim of dumpster diving.  Neverthrow away documents with your bank account details or other personal information without first destroying the information. 

DO’S:

  • Protect your personal information at all times.
  • Manage your personal information wisely.
  • Check your credit profile at a bureau at least once a year. This is a free service from any of the main credit bureaux such as:
    • TransUnion - 086 148 2482
    • Experian - 086 110 5665
    • Xpert Decision Systems (XDS) - 086 112 7334
    • Compuscan - 086 151 4131

If you are worried you may become a victim of fraud, you can ask the bureaux to put an alert on your name and you will be notified in the event anyone tries to open a fraudulent account in your name. Consumers can also lodge a Protective Registrations or register as a Victim with the SAFPS.  This is a free service to consumers. Consumers can contact SAFPS on 0860 101 248 or SMS the word “protectid” to 43366 and they will be contacted directly.

  • Destroy personal information - either shred or burn it (do not tear or put it in a garbage or recycling bag).
  • Store personal and financial documentation safely. Always lock it away.
  • Keep pin numbers and passwords confidential.
  • Pay attention to account cycles - You will regularly receive a billing statement which will detail  your opening balance ie what was carried over from the previous month as well as all credit card charges and payments and credits and fees made to your account during the cycle. Fees and charges are added to the balance from your previous billing cycle, while payments and credits are subtracted to come up with your current balance. Check carefully for any irregularities and report these to your bank immediately.
  • Verify all requests for personal information and only give it out when there is a legitimate reason to do so.
  • Install firewall and antivirus software protection to prevent a computer virus sending out personal information from your computer.

Source: SABRIC - The South African Banking Risk Information Centre and African Bank

“Banks are continuously looking at innovative and improved security measures like biometrics to prevent this type of fraud but if you do become the unsuspecting victim of identity fraud you must immediately report your lost or stolen ID or driver's license to SAPS and alert SA Fraud Prevention Service immediately on the number or sms line listed above,” concludes Ramosedi.