Debit order fraud is a massive problem in South Africa, with millions of rand stolen from bank holders’ accounts each year.
According to a 2014 report by Carte Blanche, banks receive an average of 200,000 disputes from customers with regards to “mysterious debits” – usually amounts below R99 – every month.
MyBroadband staff have also been on the receiving end of illegal debits.
Scammers who steal through this medium – often called the R99 Scam – initiate a small monthly debit order against your bank account, hoping you will not notice while they take your money.
With thousands of people targeted each month, a debit of R50-R99 per person can make these criminals healthy profits.
But how do these scammers initiate the debit orders, and where do they get the victims’ details from?

How scammers buy your details for R5

SABC investigative show Special Assignment spoke to several victims of debit order fraud recently, after which one of its investigators went undercover to find out how the companies behind the fraud operate.
The first step to the scam involves obtaining a list of victims, which the show’s investigator did with relative ease.
The investigator started their search in Durban, where they found a source who could set up meetings with those who had access to “lead” lists.
These lists are sold in batches, with the price per lead – one person and their details – varying depending on what information is provided.
Suppliers who sell these lists were found to work in established call centres or legitimate companies which have access to people’s personal details.
The first supplier the investigator made contact with sold lists in batches of 500. Each lead contained a name and surname, ID number, and a cellphone or landline number.
The price – R3 each.
“We sell for everybody,” said the supplier, adding that he had 50,000 sets of details on hand.

Banking details cost a bit more

Other lists, which include banking details, are also available on the market.
Another supplier the investigator spoke to sold people’s name and surname, ID number, and bank account details for R5 each. Lists were sold in batches of 1,500.
Once a scammer or call centre has these details, there are two options for them to implement fraudulent debit orders.
The first is to call the people on the list, offer them a product, and then action the debit order – even if the respondent declines the product being sold.
Call centre agents usually work on a commission basis, stated Special Assignment, and it is in their interest to conclude as many deals as possible.
The second option is to use a list containing the necessary information to action a debit order from the start.
In this case, a scammer or call centre does not have to contact the victim first – they directly set up debit orders with debit order processing companies to take money out of bank accounts.
Walter Volker, CEO of the Payments Association of SA, recently told Fin24 these perpetrators are mainly small call centre operators who phone consumers up with promises of all kinds of products – but with the sole aim of obtaining banking details.
Once the debit order is in place, it is up to the victim to spot it and stop it.

Police and banks decline to comment

The Hawks, and the SAPS, were asked for an interview by Special Assignment to discuss what they had discovered – but at the time of editing the show the authorities had not responded.
Special Assignment also contacted the banks for interviews about potential loopholes in their systems that are exploited by debit order fraudsters.
  • FNB declined an interview.
  • Absa promised a written response, which it failed to send.
  • Standard Bank said its head of industry payments was on leave. Special Assignment followed up, but there was no response.
  • Nedbank agreed to an interview, but then pulled out.
The Special Assignment insert on debit order fraud is embedded below.