Identity fraud in South Africa hit N10 billion


By Peter OBIORA investadvocate

Sept 28 2010 04.38 GMT




Lagos(investadvoacte)-Identity Fraud in South Africa has hit an estimated half a billion Rand (R500 million) about N10 billion. Theunis Botha, the Chief Executive Officer (CEO) of Nirph Digital (Pty) Limited, providers of the Customer Identification System (CIS) confirmed this to investadvocate Friday September 24 2010 in Lagos Nigeria.



“We have not done our direct research, but we have been speaking to people and hearing what is happening. I can affirm that the fraud in the Nigerian Banking sector is also becoming the same as in South Africa. In South Africa alone, identity fraud has reached an estimate of half a billion Rand (500 million Rands) about N10 billion” he said.




Botha further affirmed that there is hardly a person who is out there on the streets that has not being a victim of Automated Teller Machine (ATM) fraud in places like South Africa and Nigeria.


Alexander Forbes on the extent of identity fraud and cyber-crime affirmed that in South Africa, identity fraud and theft is becoming increasingly sophisticated with hackers accessing personal details of their victims over the internet.


On its part, Reuters says the rise of organised cyber-crime has led to a near 70 percent (70%) surge in the number of people falling victim to identity fraud.

Credit reference agency Experian warned of the industrialisation of identity fraud – the escalating involvement of organised criminal gangs. “ID fraud trends have moved away from opportunistic criminals to professional fraudsters who are e-enabled, IT savvy and anti-social networked” the Agency was quoted as saying.


“They steal an identity, take out a policy and then declare the person dead and claim the money” they report affirmed.


Pat Cunningham, South African fraud prevention services head, which represents major creditors like retailers and banks; in that report affirmed that fraudulent applications and claims cost members an estimated R1.1-billion in year 2008 and in many cases identity theft had been used.


“Fraudsters would then use stolen identities to make fraudulent death claims to the Department of Home Affairs in order to cash in R10 000 to R16 000 against policies” Cunningham said.


In the same vein, reported that identity theft could be costing South Africa more than R1-billion every year, according to a major credit bureau and a national insurance organisation. contrary to Botha’s claim that estimates currently stand at R500 million.


While the South African Fraud Prevention Service, a non-profit organisation that works to combat fraud, identity theft and financial crime, affirmed it is getting up to 25 complaints per day.

While Fred Steffers, Managing Director (MD) of the Consumer Profile Bureau quoted Alexander Forbes Insurance as saying that identity theft-related fraud had cost South African businesses estimated to about R276-million in the first three months of this year.

”Identity theft fraud chain usually started with the theft of personal documents: credit cards, driver’s licences, passports or ID books” he said.


“What we are trying to do is to put up a system that can eliminate or cut half of the fraud away, it will be beneficial to a country, clients will always like to move their funds to a Bank that has the biometrics system; because they know that their money will be protected and safe. Fraud is everywhere in all Banking and other related sectors, where there is money, there is fraud” Botha said.





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