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Legalbrief   |   your legal news hub Sunday 23 February 2020

More customers lose cash in SIM-swap fraud

Banks, cellphone service providers and their customers are playing the blame game as cyber thieves step up their raids on bank accounts with the help of fraudulent SIM-swaps, writes Legalbrief.

There has been a flood of complaints in the wake of the news that Media24 CEO Esmaré Weideman had become a victim of the scam, according to a report. Absa said on Tuesday that it treats fraud committed against any of its customer accounts with high priority and had proactively been able to prevent any further transactions and mitigated further loss on Weideman's account, notes another report on the site. Weideman lost R360 000 in what seems to be a hit from a SIM swap syndicate. Between Saturday and Monday and without her knowledge, an amount of R1.5m was transferred from Weideman's home loan to her cheque account. Before Absa could freeze her account, smaller amounts totalling R360 000 were transferred to an account in the name of 'Badiba Madiba', Die Burger reported on Tuesday. Absa said it was able to proactively identify suspicious activity on Weideman's account and immediately alerted the customer, froze the Internet banking profile and prevented any further transactions, mitigating further loss. 'Absa has contacted the customer and will carry out a full forensic investigation. We can only comment on the specifics of this case upon receipt of the investigators findings.' Eddie Moyce, chief customer experience officer at MTN SA said on Tuesday said there seems to be a misplaced belief that mobile network operators are liable when fraud is committed on customers' bank accounts. Moyce is quoted in the report as saying: 'Based on the fact that in order to commit a fraud on a customer's bank account a fraudster must have a customer's bank card / account number, internet banking PIN and password, mobile network operators are not liable. Our courts have already held that a SIM swap does not in itself enable a fraudster to commit fraud on a customer's bank account.' First report on the site Second report on the site

South Africans are still too lax when it comes to adhering to safety measures for their bank PIN codes, according to a recent study. The study, commissioned by Visa and FNB and which focused on customers who bank with one or more of the country's top banks, showed that one in five people have written their PIN down somewhere in case they forget it. A report on the site says more alarming is that 46% of consumers admit that someone else knows their PIN. Most of the respondents said their spouse or partner knows their PIN and uses their bank card. Although 78% of consumers feel that it is their own fault if they give their PIN to a family member and money is drawn from their account without their permission, 55% feel that it is both their and the bank's responsibility to safeguard their bank card. But the bank disagrees. 'PIN security is something each customer should make a priority, as your PIN is your ''first-line'' of defence against card fraud,' Johan Maree, CEO of FNB credit card, is quoted in the report as saying. Full report on the site

The recent spike in SIM-swap scams is worrying, says the SA Banking Risk Information Centre (Sabric), according to a Cape Argus report. It notes Sabric chief executive Kalyani Pillay said she was worried about the 'scale of crimes' committed against bank clients across the country. 'The banks are investing significantly in systems and solutions to monitor and detect such risks.' Full Cape Argus report (subscription needed)

The fraudulent swapping of cellphone SIM cards is enabling fraudsters to clean out their victims' bank accounts, including home loan accounts, notes a Personal Finance report. It states that after obtaining your details in a phishing attack, fraudsters illegally swap your SIM card to prevent you from receiving notifications from your bank that beneficiaries have been added to your Internet banking profile and that transactions have been made on your accounts. But, notes the report, the Independent Communications Authority of SA (Icasa), which regulates cellphone providers, says it has no jurisdiction over cellphone providers that fail to comply with the law governing SIM swaps - namely, the Regulation of Interception of Communications and Provision of Communication-Related Information Act (Rica). One of the aims of Rica is to regulate cellphone-related fraud. Clive Pillay, the Ombudsman for Banking Services, is quoted in the report as saying: 'It is precisely this failure to hold cellphone service providers accountable in law that exposes you and renders you vulnerable.' Rica states a service provider may not activate a SIM card on its system unless it has verified the identity of the person requesting the SIM. MTN says it does not have to Rica clients each time you buy a new SIM card, but only when you first buy a SIM card from MTN, according to the report. It notes Zaid Gardner, senior associate at law firm Edward Nathan Sonnenbergs, says it is disingenuous of Icasa to say it has no jurisdiction. Full Personal Finance report