'How Can We Help You?' - Uncovering hidden agenda

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” Attributed to the 3rd President of the USA, Thomas Jefferson… 

If they cannot corrupt the main streams, they start their own rivers. While convicted fraudster Schabir Shaik remains a private client of the 2012 ‘world’s most innovative bank’ - FNB, overly-inquisitive clients are threatened and their names recorded in an illegal database. Mobster-style, this database is only accessible via special invitation – members only. South African Fraud Prevention Services (SAFPS), a non-profit organisation created with seemingly-great intentions, has been turned into a hired-gun to deal with those the ‘Club’s members perceive to be rocking their wheels of greed. Can you eat with your mouth closed? If the answer is ‘no’, you’d better start running because if they choose to chase you, they will out-play you at every turn.

In 1996 a group of corporate leaders accepted an invitation from the late statesman Nelson Mandela to join the government in its fight against crime. Just two years into his presidency, Madiba had the wisdom to identify the root source of crime: business, especially big ones. It must have been a case of ‘keep them close, and maybe, just maybe, they will be too embarrassed to steal from you.’ That initiative resulted in the formation of Business Against Crime South Africa.

While the BACSA has since been instrumental in combating some contact crimes, it appears that the suspected white-collar criminals within its contributing membership are closely protected. Take Roy C. Andersen, who comfortably sat on the board of BACSA while surely having some innovative idea of what had helped his sponsoring company, Murray & Roberts Holdings Ltd, to be ranked among the top construction firms in the country: price-fixing. So shouldn’t this be a membership of business FOR crime?

Back to the banks: SAFPS was registered as a non-profit organisation in 2000 and boasts of itself as a frontrunner in the fight against fraud “through our role as the leading commercial reference in fraud prevention.” That sounds great on their publicly-available documentation. Untold though is the fact that SAFPS remained a secret Credit Bureau which for years operated outside the legal framework as stipulated by the National Credit Act.

Unknown to most is the ease with which entities get listed in the SAFPS database. It is like the high school black book for naughty students, one accessible only to school principals. On its website, SAFPS encourages members of the public to call their helpline should they suspect they have been victims of identity fraud.

Nav Chan responded to this invitation when, in the midst of his tribulations with FNB, he lost his green bar-coded ID book. When he contacted SAFPS, he was shocked to learn that he had already been listed in their database as a suspected fraudster. The source of the listing was First National Bank.

Unlike with other credit bureaus, SAFPS listings are not necessarily based on an individual’s credit records, but on suspected fraudulent activities: in their book, you become guilty of fraud until you prove otherwise. Nothing like innocent until proven guilty. The listing is also selective - FNB chose to list Chan because he had questioned their eBucks calculations formula, while comfortably retaining some convicted fraudsters as their private clients.

The National Credit Regulator contended that SAFPS, regardless of its role in combating fraud, was operating illegally. When the Regulator sent the organisation notice to comply or cease operations, the SAFPS sought to overturn the ‘Notice’ through an application to the National Consumer Tribunal. They did not want their operations to be watched over by a legislated regulator.

And the tribunal members, Prof. Bonke Dumisa (Director, University of KZN Graduate School of Business) and Adv. Neo Sephoti (Corporate Affairs Manager, South African Breweries) ruled that SAFPS did not have to register as a credit bureau. [We shall leave the dissection of the findings of the professor with seven degrees and his sidekick to other pundits…]

The bullying tactics of the big corporations were now eating into the legal framework, and the NCR was not giving up. The Regulator applied to the North Gauteng High Court for a review of the ruling made by the professor and the advocate.

Under High Court Case No. 58190/2010, on 26 June 2011, Judge Legodi reviewed the Tribunal’s earlier decision and set it aside. The learned judge also found that the SAFPS had “contravened the provisions of section 43 – relating to registration of credit bureaus – of the National Credit Act.” The banks-funded non-profit outfit was ordered to lodge an application as a credit bureau within 21 days and to pay the costs of the application.

The ruling concluded that if SAFPS failed to comply with the High Court order, they would have to cease operations, as per the NCR’s earlier notice. That was May 2011.

Two years after the order, as Chan was finding himself listed as a fraudster, the organisation had still not made any attempts to have its operations formalised. The irony though, at the Business Against Crime, sitting alongside settled besides Roy Andersen as a board member is Laurie L. Dippenaar, the Chairman of FirstRand Group. Could it be that it is only a crime if it is committed by someone other than your mates?

And Chan is not alone. Two confidential sources attached to the NCR’s office separately told our team that the Regulator’s investigation into SAFPS was prompted by complaints from consumers who could not understand how credit providers were declining their applications when they had entirely clean ratings with the known credit bureaus.

Several consumers with impeccable credit records have had their applications for home and car loans turned down by credit providers, allegedly based on their listing on the SAFPS database, but of course the providers never tell the unsuccessful credit applicants the source of their information - secret. Some get listed simply for being victims of fraud. Those cheque-deposit scams where fraudsters make deposits with stolen or forged cheques into your bank account and later call to seek refunds, are enough to have the account holder(s) included on the database.

After the 2011 High Court ruling, the executive director of SAFPS, Carol McLoughlin, told Mail & Guardian journalist Fiona Zerbst that the organisation was considering taking the matter to appeal. Of course they did not. Did they pay the legal cost of the National Credit Regulator as per the order? Nobody knows.

A few weeks ago, however, South African Fraud Prevention Services was formally registered as a Credit Bureau and assigned number NCRCB20. And here comes further contravention of the country’s laws; the laws banks seem to be above.

Section 43 of the National Credit Act is quite clear on who or what entities qualify to operate as a Credit Bureau.

43(4) In addition to the requirements of Section 46, a person may not be registered as a credit bureau if any person who has a controlling interest in the applicant is –

a)    A credit provider

b)   A debt collection agency; or

c)    A person who conduct any disqualified business prescribed in terms of subsection (5)

A look at the listed directors of SAFPS prompts us to wonder how the National Credit Regulator could have overlooked the glaring interest. As per records we have obtained from the Companies and Intellectual Property Commission among the directors of the organisation are listed as:

• Erich Schenk – African Bank Ltd (a.k.a ABIL)
• Nainesh Desai – First National Bank
• Kevin Maartens – Nedbank
• Poovendran Naidu – Standard Bank
• Stuart Whitby – Absa

Others are:

• Pieter Eduard Roux of Hatfield, Pretoria
• Johannes Hermanus Jacobus Bakkes of Lydiana, Pretoria
• and Carol McLoughlin (the executive director…

Whose interests are these natural persons safeguarding? The NCR seems to have lost the plot. Who is guarding the guardians? 

Chan’s matter is still far from over. After his fruitless demands for evidence of what had prompted his listing with the SAFPS, he reminded FNB that, if they stood by the alleged claim of fraud, it was their fiduciary duty to report the alleged crime(s) to the SAPS. The bank, after repeatedly claiming that they had already opened a case of fraud against him, finally did… watch out for the rest of the rot beneath our wealthcare industry.

***As the Global Greed Series continues, we expose how FNB roped in Absa/Barclays to join the vendetta, based on no real evidence at all and aimed at discrediting their former Platinum Client. The lawyers we have worked with on this case call it financial defamation and wasteful of police resources. We shall also be placing the founder of eBay, Pierre Omidyar, on the spot to address the exclusive deal PayPal struck with First National Bank. Reducing global greed must start with denying the wheels the lubricants they need, and we believe Omidyar would walk the talk.

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