Syndicated Coal Theft in SASeptember 28, 2016
Michael Barker and Partners have handled thousands of fraud related investigations over the last twenty years. By far the most common fraud involves the manipulation of payment data whereby staff members within companies change banking details to that of their own and commit EFT fraud.
In most instances the fraudster utilises the name of an existing large supplier of their company and changes the bank account number on the payment. When management check these payments it looks as though the payment is being made to the legitimate supplier when in fact the account number is that of the staff member or a close family member.
Our latest fraud of this nature occurred recently and has amounted to a loss to a company of approximately R 70 000 000.00 (Seventy Million Rand). This is one of many cases we are dealing with at present.
In most cases payment batches checked by management are not scrutinized to the level that the management would know that bank account numbers had in fact been changed and most banking systems do not correlate the name of the payee with the account number. Banks in South Africa have certainly not done enough to prevent this type of fraud, however recently there has been movement by some banks to put assertive controls in place. It still seems as though the problem persists as the losses are continuing.
These EFT frauds have cost South African businesses billions of rand each year. Many small businesses are affected and they are not insured at all for this type of crime. The most common form of Commercial Crime policy in South Africa is a Fidelity policy and most of these policies are aimed at medium to large businesses. Not smaller businesses that are experiencing fraud of this nature regularly.
Be vigilant when checking payments and do not take for granted information that has been loaded. Ensure proper password protection and access by staff to change banking details is limited, in order to prevent this type of fraud.