SIM card mess in South Africa

No one has been convicted for a serious crime committed in South Africa using fraudulently registered SIM cards in the past five years. This was revealed in a recent parliamentary response by police minister Senzo Mchunu.

Mchunu said that since 2020, law enforcement agencies have conducted 27 investigations into serious crimes committed using fraudulently registered SIM cards.

Only one of those investigations led to an arrest. The case against that person was withdrawn, meaning there have been no convictions for crimes perpetrated with a fraudulent SIM in five years.

This is even though SIM cards with fraudulent, missing, or falsified details are implicated in thousands of cases of criminal activity in the country every year.

Independent telecommunications consultant Farhad Khan believes this shows the failure of the Regulation of Interception of Communications and Provision of Communication-Related Information Act (Rica).

“Every year, thousands of fraud, extortion, kidnapping, and murder cases involve criminals utilising unregistered SIM cards,” Khan said.

Rica requires that all SIM cards sold in South Africa be registered with the personal particulars of the person intending to use that card.

When done correctly and legally, SIM card buyers must provide proof of identification, like an ID card or passport, and proof of residence.

If the card’s linked number is used in a crime, police have a name and contact details to work with when carrying out investigations.

However, over the past few years, numerous reports have found SIMs pre-registered with false, incorrect, or nonsensical information are easy to come by in South Africa, even from partner mobile network vendors.

If a card’s Rica details are fraudulent, it is impossible for South African Police Service (Saps) detectives to identify suspects that used particular phone numbers to commit crimes.

“Police statistics indicate that 62% of extortion cases involve unregistered SIM cards, highlighting a direct correlation between inadequate regulation and criminal activity,” Khan said.

“In addition, 58% of all mobile banking app fraud incidents involved SIM swaps. The absence of Rica-related arrests suggests minimal deterrence, emboldening criminal activity.”

SIM card problem impact greylisting exit

Khan argues that Rica should be reviewed urgently, especially when it comes to the fragmented regulatory oversight of the legislation.

As it stands, the Independent Communications Authority of South Africa (Icasa), the communications department, and the justice department share responsibility for enforcing various parts of the Act.

Khan also said that Rica’s shortcomings jeopardised South Africa’s efforts to exit the Financial Action Task Force grey list.

Khan’s concerns echo those of University of Johannesburg Humanities research associate Ratlohogo Rafadi.

Rafadi recently called on Icasa to step up regulatory action to counter the misuse of preregistered SIM cards in organised crime, identity theft, and financial fraud.

“Most of the 165 million SIM cards issued annually in South Africa are likely noncompliant with the Rica, thus creating loopholes that are exploited by criminal syndicates,” Rafadi said.

“A failure to control the wholesale abuse of pre-registered SIM cards will further dismantle national security, drain public faith in electronic money systems and facilitate organised crime.”

Proposed solutions require widespread consultation

Khan said President Cyril Ramaphosa’s referring the Rica Amendment Bill back to Parliament provided a crucial opportunity to rectify the systemic deficiencies that made SIM card fraud such a serious problem.

He believes that revised legislation should address several pertinent issues.

Firstly, SIM cards must be held in secure and tamper-proof SIM packaging and rigorous point-of-sale verification protocols need to be implemented.

This must be coupled with a stringent distributor and reseller accountability framework. In addition, integrating biometric verification at the point of sale would also enhance security.

Rafadi said a credible regulatory regime was essential for restoring the “purity” of local telecommunications and financial networks. He said this could be achieved through technological advancement and severe sanctions.

Khan has called on the government to engage broadly before finalising the Rica amendments and resubmitting them to the president for consideration.

“This engagement should encompass representatives from affected government departments as well as industry stakeholders,” he said.

The latter should include industry experts and relevant civil society organisations to ensure an effective, practical, and enforceable legislative outcome.