Police probe SIM swap fraud

By Damaria Senne, ITWeb senior journalist

Johannesburg, 07 May 2008

The e-commerce unit of the South African Police Services (SAPS) has begun a large-scale investigation into SIM swap fraud with a view to building a collective case.

This is according to Anne-Lise Bure-Shepherd, CFO of the Novalis Ubuntu Institute, a non-profit organisation that was a victim of SIM swap fraud in November.

The thieves cancelled Bure-Shepherd's SIM card and had MTN issue a replacement card, accessed her account and transferred about R90 460 to other accounts.

The police are still investigating the case and have arrested a number of people who were directly involved with the scam, she says.

However, the head of the syndicate has not been arrested, though the police are aware of who the person is, she notes.

The commercial crime unit will include her incident in the collective case it is building with other victims of e-banking crimes, so they can provide the courts with overwhelming evidence, adds Bure-Shepherd.

This is due to the fact that the magistrate may not easily understand the technicalities involved in an IT-related crime, she says.

According to the police report, given to Novalis following the investigation into its case, consumers have lost over R80 million in SIM swap fraud since February 2007.

The police have 96 ongoing cases of SIM swap fraud, it says.

Bure-Shepherd says she will continue to assist the police in building a strong case against the thieves. However, she does not expect a quick resolution, due to the nature of the crime and the size of the case that will eventually be presented to the courts.

Captain Riaan Morris, of the Cape Town e-commerce unit, was unable to provide further input on the case at the time of going to publication.

Hit hard

Bure-Shepherd says the Novalis Ubuntu Institute suffered severe consequences as a result of the fraud.

On Monday, the National Lottery Board begins an audit on the organisation's finances to double-check there are no other losses, she says.

In February 2007, the lotto had paid out R250 000 of the R500 000 grant it awarded the NGO, she adds. The rest of the funding is still outstanding.

Bure-Shepherd explains that the NGO provided a written report to the National Lottery Board, outlining the activities it did with the partial funding, as per procedure. "They were very happy with the report, but they were not happy with the SIM swap problem."

Another problem, she notes, is that the NGO did not receive a full reimbursement of the lost funds. Standard Bank gave Novalis only R40 000 to replace the lost funds.

The funding came through the Standard Bank Foundation, which is a current donor to the organisation, she says.

Bure-Shepherd also alleges MTN and Standard Bank were unhelpful with regard to the SIM swap fraud. "MTN did not take up the cause on the matter; they did not return my calls."

She says the bank sent her a strongly worded letter, telling her to let the matter drop after it reimbursed her.

"When you join up with these companies, it's one big happy family. But they don't want to hear from you when you experience problems."

Ntombi Mhangwani, MTN senior manager of PR and internal communications, says the cellular giant has been working closely with the banking institutions and the National Prosecuting Authority to investigate cases of SIM swap fraud.

The investigations continue, and MTN has furnished SAPS with all information pertaining to the SIM swap fraud. It is now up to the police to further their investigations, she says.

"I would also like to confirm that thus far no employees were dismissed as a result of involvement in SIM swap cases," she adds.

Standard Bank media relations officer Ross Linstrom was unable to respond at the time of publication.