‘Impersonation fraud surged after Karabo Phungula swindled data from Experian’

Context: Karabo Phungula was convicted in the Specialised Commercial Crimes Court, sitting in the Palm Ridge magistrate’s court last October, of fraudulently obtaining the personal data of millions of South Africans. It was found he had received a trove of personal and business data from data services firm Experian in 2020. He was due to return to court for sentencing proceedings on Friday. 

“This guy is a real monster but I don’t think he realises that,” said Manie van Schalkwyk, executive director of the Southern African Fraud Prevention Service (SAFPS).

“He created untold chaos in thousands of consumers’ lives because he sold their data to people who used it to impersonate consumers and get into their accounts. He made it possible for that to happen.”

The impact of Phungula’s brazen act was clear to see in the statistics, Van Schalkwyk said.

“Of all the impersonation fraud committed in the three years from 2020 to 2022, 72% happened in 2020 - the year he got his hands on the personal data of millions of South Africans.”

Eight percent of impersonation crimes happened in 2021 and 20% in 2022, the year of the TransUnion breach.

“A lot of people say they are not bothered by their information being compromised, because they don’t realise what fraudsters can accomplish with it,” Van Schalkwyk said.

What they can do is use that information to open an account in your name or contact a company you already have a bank or cellphone account with and run up huge debt in your name. The term for that is contract takeover.

“That’s possible because 90% of companies still use knowledge-based authentification. They ask you questions about your past transactions, such as when you took out a home loan, which a fraudster can very easily answer, being armed with all your information from your credit record,” Van Schalkwyk said.

Ironically, the fraudsters are, in many cases, better able to pass those authentification tests than the genuine account holder, who, when asked those questions over the phone, are not armed with their credit record information with dates and specific amounts.

There is a way to thwart impersonation fraudsters - biometrics.

“People and companies need to start using biometrics with more confidence,” Van Schalkwyk said. “It’s impossible for someone to impersonate your face or voice.”

The SAFPS is preparing to introduce a biometric-enabled authentification tool, Secure Citizen, by mid-2023. It will be a free service for consumers.

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