Identity fraud remains risk in South Africa

According to the Southern Africa Fraud Prevention Services (SAFPS), the use of real identities by criminals increased by 99% between 2018 and 2019 which highlights the threat of identity fraud in our country.

What is identity theft?

Identity theft occurs when a person deliberately uses the name and personal information of an individual or juristic person to gain financial benefits or cause financial loss to the impacted party. This type of fraud, according to the SAFPS, can cause both financial and reputational loss to the impacted parties. However, the real threat of identity theft is that it can often continue for long periods of time without being detected.

Who is a target?

Whether you’re a person who keeps a low profile or a company in the limelight, anyone can be a victim of identity fraud. Christo Snyman, Director at Mazars in South Africa and Vice President of the International Association of Financial Crimes Investigators (IAFCI) in South Africa, says they recently investigated a case of identity fraud that affected a well-known South African financial services company. About a month ago, this company received a phone call from one of their stationery providers in Cape Town. According to the stationery company, they received a credit application from the company for a large sum but questioned the legitimacy of the application. Upon closer inspection, the stationery company realised that the information provided by the applicant was inaccurate.

Two weeks later, the same company received another call from a different stationery supplier in Johannesburg who said they received a purchase order totalling R 105 315.00. Once again, the stationery supplier was alert and noticed discrepancies in the information provided by the applicant and immediately followed up with the company.

Had neither of these stationery providers followed up, they could have suffered great losses from the fraudulent applications. Additionally, the long-standing business relationship between this well- known company and their providers would have been tarnished.

How can you combat identity theft?

As the above example indicates, identify theft can result in damages for both the person whose identity has been compromised and service providers who unknowingly engage with fraudsters. According to the South African Banking Risk Information Centre (SABRIC), there are numerous ways in which both these parties can combat identity theft. Here are a few tips:

1. Take precautionary measures by never sharing your personal information with any unverified institution or individual.
2. Check whether your personal information has been compromised on free data breached websites like Have I been Pwned.
3. If you suspect that you have been a victim of fraud, call SAFPS immediately on 011 867 2234 and apply for a free Protective Registration listing which will notify credit providers to handle your information with care.
4. If you have been a victim of identity theft, immediately report it to the South African Police Service (SAPS) as well as your relevant credit provider.
5. If you are a supplier who allows clients to buy on credit, never assume the accuracy of a client’s information and always check the validity of the information they provide.

While identify theft is looming large in South Africa, there are many organisations who actively try and minimise its effect on society. Through the above measures, you can follow the correct protocol to protect your personal information and report any suspect cases of identity theft.

For more information on this topic, feel free to contact Christo Snyman, Director at Mazars in South Africa and Vice President of the International Association of Financial Crimes Investigators (IAFCI) in South Africa.