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A forensic investigation conducted by Capitec, SA’s largest bank by customer numbers, has resulted in it firing several employees who participated in a debit order switch manipulation scheme to unduly earn commissions at one of its branches in KwaZulu-Natal.

The lender received a tip-off that some employees at its KwaMashu Midway Crossing Branch had devised a scheme to deceive the company into thinking that they were successfully getting consumers to switch their financial products to the bank.

Capitec’s forensic services department found the implicated employees had manipulated the banking system by capturing external bank account numbers that did not belong to clients during debit order switch submissions.

This was done with the intention of increasing the number of debit order switches to qualify for the bank’s “branch team awards”. A total of 12 service consultants were implicated in the scheme and fired as a result.

Companies in the competitive banking sector fight for market share by, among other things, enticing consumers to switch their financial products including home loans and investments. 

The country’s lenders also seek to get clients to switch accounts, particularly those into which their salaries are paid.

FNB has fired and debarred a branch consultant for circumventing the remuneration model. The bank incentivises its branch consultants to sell financial products by earning embedded value on such sales. Simply put, the more expensive the financial product sold, the higher the consultant’s sales reward value.

One of its consultants found a way to manipulate this by inflating the value of loans sold to clients. An FNB investigation showed that on five different occasions the employee acted dishonestly. For example, the consultant concluded a loan agreement of R100,000 with a customer who had requested a loan of R30,000. When the client queried why an amount of R100,000 had been deposited into their account, the consultant transferred R70,000 back, but still earned embedded value for the full R100,000.

The same modus operandi was done on four other occasions until the bank picked up the scheme.

In April, Nedbank said it had been a victim of internal fraud in 2023 and that while no clients’ funds were taken the cost to Nedbank, net of insurance recoveries, amounted to R50m.

Corporate SA has had to clamp down on employees engaged in corrupt acts.

Vodacom recently revealed that it dismissed 631 workers and contractors for fraud in the year to end-March after the mobile communications group investigated more than 8,000 cases. The end result ensured that 15 were arrested, the group said in its annual report last month.

Professional services firm KPMG was recently swindled out of R16m, allegedly by its former bursary specialist, who is facing charges. It is alleged that in 2021 and 2022 the specialist diverted funds for student fees.

A former Absa employee was arrested two years ago for allegedly defrauding the bank of R103m. The employee allegedly transferred the money into six bank accounts from September to December 2021.

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