Banks and telecom firms linked to SIM-swap scam

The extraordinary growth of digital payments has led to a massive surge in bank fraud cases. Legalbrief reports that major banks and telecom companies have been accused of colluding and providing information about clients' bank accounts and linked accounts which have subsequently been breached. A man who had R1.8m siphoned from his bank account is one of several outraged clients gearing up for a legal fight with the companies. The banks implicated by more than 20 clients are Absa, Standard Bank, FNB and Capitec, while the mobile network providers are Vodacom and MTN. ‘We hope to launch in the next few weeks but as more information comes out and victims come forward, we are considering all avenues,’ attorney Johan Victor reportedly told Fin24. ‘We will in due course also take action against the cellphone companies.’ Representatives of the banks said they were not aware of the pending legal case and were therefore unable to comment. Victor said numerous clients have been defrauded through alleged SIM-swaps and phishing attacks. The losses range from R43 000 to R1.8m. ‘The clients have all fallen victim to SIM-swap or alleged phishing fraud. However, in none of the cases could it be found, after inspection and analysis of clients' hard drives and computers, that they interacted with any of the phishing e-mails,’ Victor is quoted in the report as saying. He said it appears that syndicates with members inside banks and cellphone companies work together ‘and gather sufficient evidence to know the structure of clients' bank accounts, linked accounts and possibility to transfer funds between accounts, such as home loans, money market or term deposit accounts’. A report on the Business Tech site notes that Vodacom confirmed it was investigating one of its agents regarding alleged SIM-swap fraud. Cell C also confirmed it was aware of the investigation and was working closely with the relevant authorities. ‘Cell C takes these matters very seriously and has many processes in place to detect and prevent fraudulent SIM swaps,’ it said. MTN could not say whether a criminal syndicate had infiltrated the company or whether its subscribers were at risk.