Organised crime syndicates are using fake debit orders to take billions of rands from South Africans: report

A major investigation is currently underway into illegal debit order scams at South Africa’s top five banks.

Fin24 reported that the investigation spans a number of financial sector regulators – including the Financial Sector Conduct Authority (FSCA), the South African Reserve Bank (SARB), and the South African Revenue Service (SARS) – who have uncovered that at least R1.6 billion a year is being fraudulently debited from the bank accounts of ordinary South Africans.

The investigation has uncovered at least three organised crime syndicates behind the illicit debit orders, with two criminal court case linked to one of these scams underway in KwaZulu-Natal.

At the end of 2018, it was reported that thousands of banking customers have raised concerns about fraudulent debit orders.

Its severity was highlighted in a Moneyweb article which stated that a number of customers had been hit by a ‘mysterious R99 debit order’.

The report estimated that as many as 750,000 fraudulent debit orders may have been implemented across the country’s five major banks – totalling R74 million.

Speaking to BusinessTech in December, Francois Viviers, executive of marketing and communications at Capitec, said that the occurrence of fraudulent debit orders has been a pain point for all banking clients and a great concern to the bank.

“Fraudulent debit order originators typically submit debit orders for less than R99 as this is normally below the SMS notification threshold and therefore does not attract as much attention,” he said.

“To protect our clients from these companies that put through invalid debit orders, Capitec has reduced the minimum value that triggers an SMS notification from R100 to R30 so that clients are informed of smaller debit orders on their accounts,” he said.

FNB said that it also detected abnormally high volumes and disputes of suspicious debit orders in December 2018 and January 2019.

The bank said in a statement that a large number of customers are disputing ‘Procall’ and ‘Mzansi’ debit orders using the FNB App and online banking – among other channels.

Read: Capitec unveils new-look debit card

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Organised crime syndicates are using fake debit orders to take billions of rands from South Africans: report