Warning on the rise in fraudulent credit applications in South Africa


Whether you are a low-key person or a business in the limelight, anyone can fall victim to identity fraud.

Nothing demonstrates this better than the recent sharp increase in companies receiving fraudulent credit applications, according to Christo Snyman, director of Mazars in South Africa and vice-president of the International Association of Financial Crime Investigators (IAFCI) in Africa. of the South, which has been this in several cases considered by IAAFI members over the past year.

Warning companies to stay vigilant in light of International Fraud Awareness Week (November 15-21, 2020), Snyman referred to a recent case that Mazars in South Africa investigated one of his clients.

“It is common practice in many companies to extend credit to companies that buy large amounts of shares from them. Business customers submit credit applications and, if approved, can track purchase orders.

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“From our conversations with vendors, we found that the number of credit requests made using false or stolen information has become a major issue.”

Snyman said his client’s information was misused in exactly this way.

“Our client was contacted by a stationery supplier who informed him that he had received a credit application under the client’s name. This was quickly followed by a purchase order totaling R105.315. Fortunately, the supplier noticed a number of inaccuracies in the request and followed up before releasing any goods.

“Nonetheless, our client is still a victim of identity theft, which can have a huge negative impact on them if the situation is not immediately reported and addressed properly.”

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Snyman said there is a very real need for businesses to become more aware of the prevalence of fraud and take action when they become aware of fraudulent activity.

“First, if you are doing business on credit, never assume the accuracy of a customer’s information – always check the validity of the information they provide. Check that the names and contact details are correct and verify the bank details by calling the applicant or client. In the case of long-term customers, be especially wary of changes in contact or bank details. “

In addition, he said all businesses must have a policy of reporting any fraudulent activity.

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“It is very unfortunate that so many companies still choose to let cases of attempted fraud go unreported. While it may seem unlikely that fraudsters will be caught, it is still important to let the police know. At the same time, businesses should let other businesses in their network know if they learn of a new scam or if their identity has been stolen. “

“Fraud and identity theft are rife in the country, and many organizations are actively trying to minimize its impact on society. However, through the above measures, you would help raise fraud awareness and fight fraud in South Africa, ”said Snyman.

Read: Insurance fraud in South Africa – what your insurer sees



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