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Sun Oct 23 05:12:33 SAST 2016

Home Affairs identity system saving banks millions in fraud losses

TMG Digital | 19 January, 2016 19:14
Gigaba was speaking after a meeting with representatives of the banking and insurance industries to discuss identity fraud‚ irregular insurance claims and related crimes. File photo
Image by: Peter Mogaki © Sowetan

Allowing banks access to the Home Affairs National Identification System (HANIS) potentially prevents a fraud loss of around R322m loss per month‚ according to Home Affairs Minister Malusi Gigaba.

He added that an annual potential prevention estimate could come to about R3.8bn.

Gigaba was speaking after a meeting with representatives of the banking and insurance industries to discuss identity fraud‚ irregular insurance claims and related crimes.

Seven of the county’s banks are using the HANIS verification service to verify the identity of prospective and current clients through their fingerprints.

“This strategic initiative was to ensure that people’s savings‚ investments‚ deposits and earnings are secure in the various banking institutions. It was to arm the banks with a reliable online tool for confirming that persons presenting identity documents were indeed who they purported to be.

“This System‚ a first for South Africa‚ has proved to be a potent weapon with which to stage a daring combat against identity fraud in its many manifestations. Reports received from banks show syndicates now know that they cannot for instance get away with ID photo replacements due to the HANIS Verification‚ and that identity fraud has therefore decreased‚” Gigaba said.

A public-private initiative providing insurance companies with a direct link to the National Population Register had also lowered in significant ways the number of fraudulent claims that were paid by insurance companies‚ resulting in them saving millions of rand‚ he added.

The Verification of Personal Detail system‚ which went live in September 2014‚ enabled insurance companies to verify various aspects of personal identity and documents like death certificates‚ with good results.

“The system allows for consistent automated processes to detect irregularities that can assist with fraud prevention‚ and therefore has been instrumental in the ‘all-out’ fight against fraudulent insurance claims.

“Using this system‚ participating insurance companies have been able to fast track the payment of valid claims in favour of beneficiaries who at times desperately need the funds.”

According to the Association for Savings and Investment South Africa‚ the total number of irregular death and funeral claims detected in 2014 was more than three times higher than in 2013‚ Gigaba said.

“In 2014‚ 7‚360 fraudulent claims were stopped‚ compared to only 2‚093 in 2013. The value of the claims in 2014 was slightly lower at R 402.8 million compared to R 524.6 million in 2013.”


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