SIM Swap Fraud Growing in South Africa

SIM Swap Fraud is a term that has been doing the rounds in the South African media lately. It is a new style of cell phone banking fraud which uses a combination of your bank details and phone number to withdraw money from your bank account without your permission or knowledge.

SIM Swap Fraud generally starts with a phishing e-mail that gets the potential victim to disclose their mobile or internet banking login details. Once the fraudsters have this information they then go to the victim’s mobile phone operator and, using fake identification and proof of address, they pose as the victim and request a new SIM Card. This means that the victim’s current SIM card is cancelled and the fraudsters now receive all their calls and SMSs on the new SIM. This includes the ‘One Time Pin’ SMSs that enable them to make payments from the victim’s bank account. The fraudsters are then free to empty out the victim’s bank account.

While SIM Swap Fraud is still a relatively new technique, and only makes up a fraction of all banking fraud, it is alarming to note how it has grown over the last year.

According to Susan Potgieter, general manager at the commercial crime office of the South African Banking Risk Information Centre (Sabric), the number of incidents was under a 100 in 2011, but has jumped to more than a 1000 in 2012. This means it has grown at a rate of 900% in just one year.

What is particularly interesting about SIM Swap Fraud (or particularly vexing if you are the victim) is that there is still a grey area round who is liable when this type of fraud occurs. Is it entirely the victim’s fault for not being careful enough with their phone and bank details? Is it the bank for not keeping your money safe from thieves? Or is it the cell phone company for acting as a conduit for the fraud?

The complex nature of the fraud, and the staggering increase in incidents, has led to a special task force being formed between mobile phone operator MTN and ABSA one of South Africa’s biggest banks. Their aim is to clamp down on SIM Swap Fraud and implement preventative measures such as improved authentication processes. It is hoped that this will help both the banks and the mobile providers to fight back against this type of fraud.