My name is Wimpie Nel. I am the owner of a company called Verifraud see www.verifraud.co.za. We are based in South Africa with offices in Durban, Cape Town, Johannesburg, and we also service clients in Mozambique, Walvis Bay, Zimbabwe, Lesotho, and Swaziland. We investigate and audit all fraud, theft, and staff dishonesty related incidents and that include employees who moonlight, fired employees who act against their restraint of trade agreement and employees who misuse company vehicles. One of the aspects that we are currently investigating is syndicate fraud pertaining to reward cards. A syndicate member will obtain reward cards from different service providers. The following major companies currently issue rewards/loyalty cards in South Africa. These cards offer immediate discounts and special deals and in certain circumstances reward customers with points for their purchases, which can be redeemed for discounts and special offers making them particularly popular among value-conscious shoppers. See a few examples of these cards:
- Checkers Xtra Savings
- Clicks Clubcard
- Shoprite Xtra Savings
- Capitec Live Better
- Pick n Pay’s Smart Shopper
- FNB eBucks
- Dis-Chem Loyalty Benefit Program
- TFG Rewards (The Foschini group)
- Woolworths Rewards
- SPUR/Panarottis Loyalty card.
- Building suppliers loyalty cards
Syndicates collude with petrol attendants, cashiers, business managers and other staff to create fictitious cash transactions where a transaction will be loaded and the rewards card will be scanned and straight after that the fictitious transaction will be cancelled or withdrawn. The internal banking and transactional history will not show any transaction so it will not be noticed on the audit trail but on the rewards/loyalty system the points will be allocated to the card holder. Over a period of time the card holder will then redeem the points for groceries, cash, or other benefits. Although the service provider where the rewards/loyalty card was scanned did not have any direct prejudice it is just a matter of time until the company that issued the rewards/loyalty card realized what transpired and because of vicarious liability the service providers can be held liable to pay for the fraudulent money. In South African law, vicarious liability means that an employer can be held responsible for the wrongful acts of their employees, even if the employer was not directly at fault. The service providers have a duty of care to investigate these types of transactions and to report them to the different rewards/loyalty card companies. Verifraud can assist you with this investigation. If you notice that there were a number of cancelled transactions, especially after hours, you view your CCTV footage and see if there was any customer at the time at the forecourt/till point. In most instances there will not be a customer and in such cases the staff members linked to the transaction would have created a fraudulent transaction.
We also investigated a syndicate involved with a specific restaurant group who have a loyalty card program, and the staff will scan a specific card linked to a specific employee on different transactions where the client who paid does not have a loyalty/rewards card. The specific card that was scanned is not linked to the customer who was paying for the transaction. The staff member then sells the points to other people who intend to use the same restaurant group.
Verifraud will then assist you in registering a Police case and assist you in recovering the fraudulent money and charging the employee for fraud as a misrepresentation was created to the rewards/loyalty card company that a legit transaction was taking place well knowing that it was not the case. We suggest that when you do realize that you have this problem in your company not confront your employees but contact Verifraud so that we can do an entrapment exercise with the assistance of the SAPS. We also assist our clients with polygraph tests and lifestyle audits of staff implicated in fraud/theft matters and we can also do background checks on new clients/employees. If you want peace of mind that your business is safe when you sleep at night contact us today. Let us protect the name and reputation of your business.