The Companies and Intellectual Property Registration Office (Cipro) has opened an investigation into fraud occurring in its systems.
While the office identified problems with its name reservation systems in 2007 and made several efforts to improve these, it has only recently opened an investigation into fraudulent activities on its system.
While several complaints of identity fraud or company hijacking date back to 2007, the office said a cloning scam was only recently uncovered. A special, multi-disciplinary task team has now been appointed to conduct a full investigation into the extent of the problem.
To date, the investigation has revealed that fraudsters falsely claimed associations with entities registered on Cipro's database in order to clone legitimate businesses for financial gain.
Cipro CEO Keith Sendwe also announced that a number of Cipro employees had been suspended pending the outcome of a complete fraud investigation. He added that a number of cases had also been opened with the South African Police Service against individuals who falsely claimed to be Cipro agents in order to commit fraud.
“Within Cipro we have zero tolerance when it comes to fraud. An internal fraud investigation, which commenced in January this year, has resulted in a number of changes and the general tightening up of procedures in order to combat fraud. Our aim is to bring those responsible for this crime to book and to put a watertight action plan in place to prevent any future reoccurrence of this heinous crime,” said Sendwe.
Improving systems
Sendwe declined to state how much the fraudulent activities had cost companies, saying only it was “considerable” and that investigations were being conducted.
“A number of companies have incurred considerable financial losses through the callousness of individuals who participate in these fraudulent activities. We have locked down our systems in order to make fraudulent activities of this nature impossible in the future and will be prosecuting the perpetrators of these crimes.”
Cipro has, in the interim, put a number of systems in place to safeguard companies against fraudulent activities. Cipro is implementing an enterprise content management system in an effort to become a fully electronic environment. The office says the new system will allow it to use a single e-form to capture data from all its clients.
New security measures include the implementation of changes in the lodgement of name reservations. According to Sendwe, the new customer verification system is another way in which Cipro is clamping down on fraud.
“We recently launched the customer verification system whereby customers need to be verified and authenticated by a registered Commissioner of Oaths before they will be allowed to effect electronic changes on their company profile. This human intervention will go a long way in assisting us in rooting out fraudulent activities.”
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