Fraud syndicates use public data to access their victim’s details

November 1st, 2018
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Head of ENSAfrica’s Forensics department, Steven Powell, presented on identity theft and abuse of information in fraud and corruption at the Fiduciary Institute of Southern Africa conference held in Johannesburg.

By Kgomotso Ramotsho

The Fiduciary Institute of Southern Africa (FISA) held its eighth annual conference themed ‘Privacy, protection and disclosure in an online world.’ The conference was held in Johannesburg on 20 September. Head of ENSAfrica’s Forensics department, Steven Powell, presented on identity theft and abuse of information in fraud and corruption. He said when fraud syndicates want to access one’s information, they look for information on a public data platform, such as –

  • property details, which they can obtain from a Deeds office;
  • company’s information, which they can access at the Companies and Intellectual Property Commission (CIPC); and
  • credit checks on the individual they are targeting.

Mr Powell pointed out that often fraud syndicates target call centre employees and persuade them to work with them, promising them money and a better life. He added that in 2010 the retail industry was hit hard by card cloning fraud. He said fraud syndicates worked with cashiers during the 2010 FIFA World Cup tournament, which was hosted in South Africa (SA), at various stores to clone credit cards belonging to foreigners. He pointed out that some retail stores lost between R 200 000 and R 300 000 a week during that time.

Mr Powell said another area where data is mostly exploited are Gmail accounts. He added that syndicates can easily access Gmail accounts and warned that when users send important, sensitive information they should use password protected documents. He said that syndicates also target companies during the tax season. Syndicates create false companies and claim they are directors of that particular company and change the banking details of that company. They then send a notice to the bank with a letter confirmed by the CIPC to change the banking details and then send another letter to South African Revenue
Service  (Sars) notifying them about the new banking details. Sars would then pay tax returns into the new account belonging to the fraud syndicate thinking they had paid the correct directors of that particular company.

Member of the South African Chapter of the Association of Certified Fraud Examiners and part time lecturer at
the University of Pretoria, Doctor Janette Minnaar-van Veijeren, spoke at the conference.

Mr Powell pointed out that syndicates can access and change information on salary slips, bank statements, death certificates, marriage certificates or identification documents and use it to commit fraud. He warned that people should be careful how they handle important documents and should know how to dispose of garbage that might have any information syndicates can use to access important information.

Dealing with conflicts of interest

Member of the South African Chapter of the Association of Certified Fraud Examiners and part time lecturer at the University of Pretoria, Doctor Janette Minnaar-van Veijeren, said professionals in various industries are held to high standards, with legal implications set for these professionals. She added that there are values and ethical norms for the manner in which professionals advise their clients. She pointed out that professionals, must be able to consult and protect their clients’ confidentiality; manage conflict of interest; and be honest.

Dr Minnaar-van Veijeren said that ethics is the highest standard of compliance, even higher than the law. She referred to the Trust Property Control Act 57 of 1988, where it states that ‘[a] trustee shall in the performance of [their] duties and the exercise of [their] powers act with the care, diligence and skill which can reasonably be expected from a person who manages the affairs of another.’ She continued and said that any provision contained in a trust shall be void insofar as it would have the effect of exempting a trustee from or indemnifying them against liability for breach of trust where they fail to show the degree of care, diligence and skill required.

Dr Minnaar-van Veijeren said the common law practice has always been to take care of the interest of the company with care, skill, diligence and good faith. She added that good faith is when one makes sure that the main duty is to care, have compassion, be responsible, be honest and having the integrity to keep one’s promise.

Developments with electronics

University of the Free State law lecturer, James Faber, noted that for a Will to be valid, a testator must comply with all the statutory formalities as set out in the Wills Act 7 of 1953. He said currently in SA the statutory Will presumes that a document be written, signed and attested. Mr Faber discussed whether a Will, can be in nuncupative (oral) form. He pointed out that SA does not allow for oral Wills, as the country has one law that speaks to Wills.

Chairperson of the FISA board of trustees, advocate Sankie Morata, officially launched the FISA bursary at the organisations eighth annual conference held in September.

Mr Faber added that a Will can be drafted electronically, however, it cannot be executed electronically. He said the Wills Act presumes that a Will must be in writing, be signed in different places and on different pages. He pointed out that SA does not allow video or audio Wills. He stressed that a Will must be expressed in writing and suitable for complying with the formal requirements of the Wills.

Regulatory update

Acting Chief Master of the High Court, Theresia Bezuidenhout, said the Master’s Office is looking into using an e-filing system. She added that legal practitioners would be able to fill in their clients trust files online and e-mail them to the Masters Office who would deal with them online. She pointed out that in the past they experienced challenges with very old trust files that were obtained by the Master’s service provider. However, she said files that are currently in the Master’s Office system should not be a challenge when implementing the change.

Ms Bezuidenhout noted that the Master’s Office is working on a policy change, but pointed out that presentations are still to be made to the Minister of Justice, with regards to reg 910 of the Attorneys Act 53 of 1979. She said the aim of the regulation was to protect work for legal practitioners. She added that the Master’s Office has kept reg 910 and that is supposed to indicate who is prohibited from doing estates.

Launch of FISA Bursary Trust

Chairperson of the FISA board of trustees, advocate Sankie Morata, said the fiduciary industry is aging. He added that FISA established the bursary fund with the intention to give back to the community and grow the fiduciary industry by identifying young people who are suitably qualified to study in the field of fiduciary. He pointed out that those who qualify to apply for the bursary can be people who are working or studying, whether post-graduate or under-graduate. He noted that the bursary aims to build skills in the fiduciary industry. He pointed out that investing in the youth of SA will lead to the growth of the SA economy.

Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.

This article was first published in De Rebus in 2018 (Nov) DR 13.

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