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PEP Instant Money irregularities oversold

Pep stores, Picture: Henk Kruger.

Pep stores, Picture: Henk Kruger.

Published Sep 18, 2023


PEP said that approximately 15 million cash transfers were processed this way each year via CashSend from ABSA and Instant Money offered by Standard Bank.

The affordable brand retailer added that the vast majority of money transfers were processed as intended and without incident and that only around 0.000094% of them fell victim to fraud.

That narrowed it down to about a dozen cases.

Over the past few weeks, social media posts alleged that the PEP store money transfer facility was not reliable because the money transferred using this store's facility was sometimes withdrawn before the rightful recipient could take ownership of it.

Some people who vented on public platforms alleged that the store cashiers were to blame, while others said they had been alerted by PEP cashiers not to trust the facility. Some defended the system, saying that this was unfathomable because the pin was only known by the sender, who then shared it with the recipient.

In response to Personal Finance enquiries, PEP said it was all too aware of the impact these fraudsters had on the lives of its valued customers. ‘’Unfortunately, there are events that can take place where these pins are shared with the incorrect party by the customer, or syndicates access the PIN using various methods. As a business, we are constantly exploring ways to help protect our customers while providing a convenient service to those without a bank account,’’ said the retailer's spokesperson.

They added that they worked closely to assist the South African Police Service (SAPS) and their banking partners to investigate any reported cases of fraud, and when the outcome of the investigation was that fraud had indeed occurred, the customer got refunded.

PEP said the cases of refunds (and the values thereof) were handled by the banks and facilitated by the SAPS. Thus, PEP was not involved in the refund process. The retailer said cases opened with the SAPS were investigated and dealt with accordingly. ‘’The financial institutions with whom PEP has agent agreements (in this instance ABSA and Standard Bank) assess PEP's operational procedures and controls for the necessary compliance on an on-going basis, to mitigate any undue risk.’’

The company said it was committed to delivering convenience to its customers, and the CashSend and Instant Money facility that they facilitated on behalf of their banking partners, ABSA and Standard Bank, was created to provide a convenient service to those who needed to send money to a recipient who did not have a bank account.

‘’As a retailer, we take our customers' safety and security interests seriously, and invest significant resources to make the in-store stages of this service as secure as possible. Among the security features, unique, non-sequential voucher codes are issued to the customer for each transaction generated, the customer is asked to attach a 4-digit PIN of their choosing to each transaction, and the highest level of compliance is adhered to when the customer is requested to input the PIN code via the in-store PIN pad," the store said.

Standard Bank said it took fraud matters seriously and would investigate all issues that a customer has reported to them, and it worked with the police once a customer has opened a fraud case. ‘’Every case is treated individually by the police as customers are asked to open a case if they believe that they were compromised in any way. In terms of cases that get opened, they are not common for the four million customers that send Instant Money every month. If a case is opened, the bank treats every matter seriously and ensures that we can help the customer to get a resolution of what transpired.’’

The bank's spokesperson said their Instant Money solution continued to grow by over 20% year-on-year as they now processed over R3 billion worth of vouchers every month, which was testimony to the reliability of the solution. It said Instant Money Transfer was very reliable, which was why it continued to be one of South Africa’s most trusted solutions, with over 50 000 access points nationwide.

Standard Bank said when a customer needed to enquire about what happened to the voucher funds, they could call the Standard Bank instant money centre on 0860 4666 39. It said they would first give the customer as much information about the voucher. ‘’If the customer is convinced it was a fraud, the call centre agents will advise them that they need to go to the police station and follow the subpoena process should the customer not be happy with the information that they have received.’’

It added that if customers had complaints, they referred them to the Customer Resolution Centre, where Standard Bank would further look into assisting with the matter. It said if customers were not satisfied with the response, they were then referred to the ombudsman for independent adjudication.

From the Absa side, the spokesperson said the bank was committed to delivering best-in-class banking service to all their customers. ‘’As a responsible service provider, part of this commitment entails ensuring that all our systems are fully operational and that the necessary safeguards to prevent financial crime, including fraud, are taken at all times. While Absa takes note of your enquiry, we have received no reports of system anomalies about CashSend at Pep Stores and can provide assurances that the offering is fully secure. Against this background, Absa takes these allegations seriously, and any evidence of irregularities will be thoroughly investigated should that be presented to Absa. Customers experiencing difficulties with withdrawals can call us on 0860 77 77 65.”