Cape Town – Capitec Bank said the onus is on clients to prove their banking activity is not fraudulent, after which it will unlock closed accounts.
On Monday, Fin24 reported that Capitec [JSE:CPI] had closed over 2 000 bank accounts linked to alleged Ponzi scheme MMM.
Capitec Bank head of communications Charl Nel told Fin24 on Tuesday that Capitec Bank uses sophisticated fraud detection technology that automatically “soft-locks” MMM accounts.
“In January we went on record to indicate that our system automatically soft freezes suspected MMM accounts,” he explained.
“The onus is then placed on the client to prove that the activity on the account is not fraudulent,” he said.
“If the client has proof that the account activity was not fraudulent, and the account is reopened, but the same transaction pattern is detected on the account once again, the account will again be soft locked until the client can provide proof that no fraud took place.”
He said Capitec Bank is “probably not the best bank to use for those involved in the MMM system”.
Capitec CEO Gerrie Fourie told Fin24 that “the Ponzi scheme MMM had a big impact on us”.
MMM members, who have taken the issue of its illegality to court, revealed the impact this had on its members.
Deon Janse van Rensburg said in court papers in April that MMM “participants are having their bank accounts frozen on the basis that proceeds from a Ponzi scheme are receipted into these bank accounts”.
“These participants were left unable to meet their basic financial obligations as a result of their bank accounts having been frozen without any conclusive evidence that the money so received contravenes any act or regulations, but on the mere whiff of a media rumour.”
FULL STORY: MMM fights Ponzi label
An investigation into whether MMM is breaching any laws in South Africa is a priority, the Directorate for Priority Crime Investigation (Hawks) said in April.
The Hawks said its probe into MMM moved from the cybercrime and digital forensic laboratory to the Commercial Crime Unit, following an initial review of the scheme by the NCC in 2015.
“The preliminary inquiry was opened following the NCC complaint and while the investigation is still at an early stage, we view this matter in a serious light,” Hawks spokesperson Brigadier Hangwani Mulaudzi explained.
It has been confirmed that MMM is not a member of the Financial Services Board or the National Stokvel Association.
FULL STORY: Hawks: Probe into MMM is a priority