The way South Africans conduct their banking will soon change.
Identity theft and an increase in fraud have led to the South African Banking Risk Information Centre (Sabric) getting access to the Department of Home Affairs fingerprint verification system.
Bank clients will have to have their thumb prints scanned and produce their identity documents for any transactions.
Sabric is set to launch the safety initiative today and release further details on when the banks will implement the initiative.
The 2010/11 crime report, released in September, showed an overall increase of 52.9 percent in commercial crime nationally over the past five years.
In KwaZulu-Natal, commercial crime has increased every year since 2004, with 15 276 cases reported for 2010/11.
With white-collar crime on the increase, experts said the Sabric plan would help combat fraud at banks.
The system, known as Hanis (Home Affairs National Identification System), contains citizens’ ID numbers, fingerprints and photographs, allowing banks to do on-the-spot identity verification that can be checked against the ID produced by a client.
Senior researcher Charles Gorendema, of the Institute for Security Studies’ organised crime and money laundering unit, said the initiative would reduce crimes committed in banks by people who presented false identity documents.
But he warned that it would not be a panacea for identity theft and fraud because some crimes were committed electronically, when criminals did not need to appear in person.
“A stolen bank card could be cloned and used as if it was the genuine card,” he said.
Still, the new security does offer the possibility of preventing crimes such as the one that left Nundlall Rabilal temporarily out of pocket.
Speaking of his identity theft ordeal in 2009, Rabilal said he had been shocked to discover he had taken out a R50 000 loan from a bank.
“I enquired only to find out that the loan was taken out using my name,” he said. “The bank system showed an ID with all my particulars but a different picture. I laid a charge with the police, and the bank investigated the matter. My money was refunded. I still wonder how it happened because I never lost my ID.”
Also in 2009, Vinay Maharaj, a teacher at Chatsworth Secondary School, learnt that someone had taken out a credit card in his name and that he was paying for it.
“It took me almost two years to sort the matter out,” he said. “The experience has made me very paranoid. People should be alert all the time and check each and every line of a bank statement. It can happen to anyone because how they get hold of a person’s particulars is still a mystery.”
KZN police spokesman, Lieutenant-Colonel Vincent Mdunge, said there were different ways of using identity theft to commit fraud.
He said when a person stole an ID, that person could lift the plastic to change the picture. The ID would still look like the original.
“Some people hand in their IDs when they buy something or secure a loan at the loan shark. At times the ID is stolen or lands in the wrong hands. It depends on how the syndicate operates, but there is no fixed way that criminals use identity theft to commit fraud.”
Two common forms of identity theft relating to banks are “account takeover fraud”, when a person gains access to an existing account by impersonating the owner, and “true name theft”, when a person opens a new account using false identification.
Colonel McIntosh Polela, a national police spokesman, said there had been many cases of IDs being tampered with and used to obtain loans, and this had cost banks millions.
He said identity theft was not restricted to loan applications but included mortgages.
“This is a serious problem,” Polela said. “The new system will assist in identifying the person immediately because the information will be matched against a person’s ID.”
The banking industry has already introduced an electronic process to verify bank statements to prevent fraud related to credit applications.
Sabric chief executive Kalyani Pillay said this was to ensure that statements were not photocopied or altered.
Capitec Bank has a biometric fingerprint reader system and photographic identification that registers clients. It is not linked to the Department of Home Affairs.
Iain Orpen, head of forensic services at the bank, said: “If our client produces an ID that does not belong to them, the system will pick it up. If a person walks in and produces an ID number familiar to the system, it will be picked up. The client and the ID must both match the information on the system.” - Daily News