This is the fourth field diary entry from Tshepo, one of our Yoti Digital Identity Fellows. His year-long research project is looking at the digital identity landscape in South Africa, with a specific focus on the national smart ID identity programme from a human rights perspective. To follow his whole research project, you can find an archive of his monthly field diary entries here.
Identity theft is rising in South Africa, with fraudsters costing the economy more than R1 billion every year. While each province has its own story to tell in terms of statistics and impact, the problem is truly a national one. My research has continued in the Western Cape, the official COVID-19 epicentre of South Africa, as new challenges have affected this widely known city – the one with blue skies and an ocean view, overlooked by Table Mountain. The area has been hard hit by the pandemic that continues to spark fear and distress among the locals and the government. As of the 28th June 2020, the Western Cape had accounted for 59,315 confirmed cases out of around 132,000 cases nationally.
The Western Cape insisted on re-opening its economy despite resistance from the national government, claiming that it has been their high levels of testing that has led to the high number of detected cases. This high level of testing has resulted in significant challenges across the city as health workers fanned out to businesses and people’s homes to carry out tests. Being able to identify who is, and who isn’t, a bona-fide health worker has turned out to be a big challenge.
Cape Town, previously known as the city that never sleeps, is eerily empty in the evenings due to lockdown restrictions. But one thing is for sure – fraudsters operate with no lockdown restrictions. Many have taken advantage of the lull to reinforce their positions within the city, something which has been easier than normal given the cities primary focus on flattening the curve of the coronavirus.
Unlike other provinces, the Western Cape has seen positive adoption of the Smart ID Card. That said, even prior to COVID-19 there were many reported cases of ID theft and many organisations have started taking an interest in the prevalence of identity theft and what it means for its victims. Many people go about their daily lives unaware that they were victims of fraud until they see the negative knock effect of their credit score. Some have indicated that they usually only find out they have become victims of identity theft when checking their credit report while applying for a home loan or car finance.
The province has also faced challenges offering relief to undocumented refugees and providing shelter for homeless people. Fraudsters regularly take advantage by selling applicants fake IDs and passports. This takes place in the wake of a pandemic where everyone will do anything to get access to government handouts. The increased rate of passport forgery has been alarming. Eight foreign nationals and a South African home affairs department official have recently been arrested in connection with alleged corruption related to passports.
Citizens in the province have also indicated they’ve been noticing an increase in the number of fraudulent transactions in their accounts, a type of fraud that is becoming a trend in South Africa as a direct result of high identity theft. Consumers who discover fraudulent transactions on their bank accounts face a barrage of red tape to sort out the problem, and a threat of blacklisting if they try to stop the payment.
There has also been a rise in the number of people who have been blacklisted over unpaid accounts they’ve never opened or unpaid invoices from reputable companies that they have never engaged with. With companies now willing to allow people to agree contracts or open accounts online instead of over the phone or in person, fraudsters have had a field day opening accounts on behalf of their victims using their information, and purchasing goods.
The province also has an unemployment rate of 20.4%, with many businesses closing and people being laid off. Fraudsters have also been able to take advantage here, pretending to represent companies or HR departments with open positions and enticing their victims to submit applications using personal and other sensitive information. This information is then used to commit different kinds of financial or identity fraud.
Since the Western Cape is a coastal province with a major port, fraud usually takes place in trade-related services where goods are obtained illegally before being transported up-country. To put it simply, fake identities are used to load or unload goods at the hub and ports. Department of Transport employees have recently been arrested for allegedly illegally importing vehicles which were fraudulently registered, and for issuing fraudulent police clearances in the Western Cape.
Another problem arises when people throw personal documents away without first shredding them. Fraudsters now target frequently-used dustbins in search of personal documentation they can use to impersonate a victim. Fraudsters are even impersonating officials by claiming to be from the fraud department alerting the client of a possible fraud attempt, effectively luring the victim to hand over personal details to access their funds. As a result, local companies are beginning to place their hopes on biometric authentication solutions, aimed at validating and verifying someone’s data using their identity registered on the Department of Home Affairs database.
Locals have also indicated they sometimes make use of services from the Southern African Fraud Prevention Service (SAFPS), a non-profit organisation which is leading the fight against fraud and financial crime. They have a database with all the banks and can signal alerts during a scam. Locals are continually advised to use a secure place to store and protect their identities, with the Government of Cape Town now taking it upon themselves to educate the public in how to avoid identity theft.