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MTN customer loses R97000

Weakness in security allows fraudsters to plunder MTN client’s bank account.

JOHANNESBURG – A weakness in MTN’s security has allowed fraudsters to plunder the bank account of one of its clients. In February this year, longstanding MTN client Eugene Malan lost R97 000 after an illegal SIM swap was performed on a cell number linked to his bank account. Malan is alarmed that he received so little protection from MTN. What’s more, despite the serious nature of his complaint, Malan says he has received no response from MTN for two months.

Malan’s problems began when he upgraded his MTN contract. The contract is in the name of Malan’s wife, Louise, but is linked to an account he has held at Absa for the past 27 years.

The upgrade took place at MTN’s Cape Road branch in Port Elizabeth at around 15h30 on Thursday February 7 this year. Malan provided the branch with the required “Rica” documents. As part of the upgrade he received a new SIM card. Malan left the branch with the latest iPhone.

But Malan did not enjoy his new phone for long. On the evening of the next day, Friday, February 8, the SIM card stopped working. Malan made some enquiries with MTN. He was told that the problem might be caused by an old generation SIM card which would not work with newer phones. However, after a Sunday-morning visit to an MTN store, Malan discovered the truth: a SIM swap had taken place on the account. This meant that somebody else had been issued with a new SIM card for Malan’s number.

The swap took place on the Friday evening, after hours, at 20h52, less than 30 hours after Malan upgraded his account. It was done at an MTN branch in Vereeniging, called Phigerton T/A Sel & Satellite.  

An MTN shop consultant informed Malan that there had been several similar cases over the December holidays in which MTN clients had fallen victim to bank fraud. Worried, Malan immediately went to an Absa ATM, where he discovered that amounts totalling R97 000 had been raided from his bond, credit card and cheque accounts. The money was transferred to a Capitec account from where it was immediately dispersed to another 15 accounts and eventually withdrawn from ATMs.

After some further enquiries, Malan discovered that this breach of MTN’s systems is not unusual.

Says Malan: “My wife phoned the branch in Vereeniging where the fraud took place. There she found out that it was an illegal SIM swap and no documents were presented. The agent who supposedly did the swap told my wife directly that she has to change her login detail on their systems on a very regular basis as there were 30 illegal SIM swaps from the beginning of February using her name and login details. It always takes place after hours. She is convinced that it’s an inside job or hackers.”

After discovering the theft of his money, Malan immediately reported it to Absa’s fraud department and the police.

Absa advised Malan that it was not liable for his loss. This was because the fraudsters had used Malan’s login details to access his bank account. What’s more, they had used a one-off password that was sent to his MTN cell number.

Absa reminded Malan that it was his responsibility to ensure the safekeeping of his PIN and password.

It seems the fraudsters who targeted Malan’s account were very sophisticated. Somehow they obtained his login details at Absa, most likely through a so-called phishing e-mail scam. Once they had that information, they needed to hijack his cell number, so that they could receive the one-off password necessary to transfer funds out of his account. This they achieved through the fraudulent SIM swap, done through the Vereeniging branch.

Malan feels that MTN failed to protect him. He wants to know how it was possible for the SIM swap to take place. Malan has laid complaints with MTN, its ombudsman, and Icasa, but two months later has yet to receive a response.

Frustrated by MTN’s apparent indifference to his predicament, Malan took his story to Moneyweb. On February 27, Moneyweb posed the following questions to MTN’s public relations manager Lucky Mokabane:

  1. Has MTN conducted an investigation into how the Vereeniging SIM swap took place?
  2. What documents were presented to the branch in Vereeniging that facilitated the SIM swap?
  3. Does MTN accept any responsibility for the fraudulent SIM swap?
  4. How can other MTN customers be sure that the same thing will not happen to them? 

MTN acknowledged Moneyweb’s questions, but more than a month later no reply has been received. This poor communication from MTN is not unusual. For more, see the following articles: “MTN didn’t take my fraud case seriously” – customer and MTN unafraid of Icasa

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