Express Kidnapping, A Growing Threat in SA

A disturbing new crime trend has emerged in South Africa, where victims are being kidnapped and forced to make transfers from their banking apps under duress. This alarming development, known as “banking app kidnappings” or “express kidnappings,” is on the rise and poses a significant threat to individuals and businesses alike. This article aims to shed light on this dangerous trend, its financial implications and strategies for risk mitigation, including specific banking measures to protect against unauthorized access to financial accounts.

The Escalating Crisis

Express kidnapping, a form of short term abduction, has seen a dramatic increase in South Africa. Based on statistics provided by iToo, between January and March 2023, 3,641 kidnapping cases were recorded, marking a 10% rise compared to the same period in 2022. The Global Initiative Against Transnational Organised Crime reported an average of 1,143 kidnappings per month during the first half of 2022, nearly doubling the monthly average of 700 cases in 2021.

Carte Blanche Exposé: Unveiling the Depth of the Crisis

A recent Carte Blanche investigative report, aired on December 1, 2024, revealed disturbing trends in express kidnappings, particularly in the Eastern Cape:

• Since 2022, foreign nationals, especially Ethiopian businessmen, have been primary targets in the Eastern Cape.
• In Qonce (formerly King William’s Town), at least two people are reportedly abducted every week.
• The kidnappings appear to be well organized operations, with ransom demands made to victims’ families.
• There are allegations of police involvement in some kidnapping operations.
• These small scale kidnappings are believed to fund larger criminal operations, with concerns that wealthy South African business owners may become future targets.

Modus Operandi

These criminal syndicates employ various tactics to execute their “shakedowns”:

• Forcing victims to make payments to foreign bank accounts, making fund tracing nearly impossible
• Using victims’ accounts for online purchases both locally and internationally.
• Making multiple digital wallet payments or account transfers while holding the victim hostage, as other syndicate members withdraw cash from ATMs.

In all cases, standard banking app security features such as PINs, biometric authentication, and facial recognition prove ineffective when the victim is under duress.

Who is at Risk?

Contrary to common belief, express kidnapping can affect anyone in South Africa, regardless of social or economic status. While high profile cases like the Moti brothers’ kidnapping grab headlines, ordinary citizens are increasingly falling victim to this crime.

Financial Implications and Insurance Challenges

Banks typically do not cover losses incurred during express kidnapping incidents, leaving victims and their families to bear the financial burden, unless they have insurance cover. This is where the distinction between fraud and theft becomes crucial.

Fraud vs. Theft: Why Some Insurers Won’t Cover Express Kidnapping

Most Commercial Crime and Cyber insurance policies focus on covering losses of intangible assets and loss of funds directly emanating from insured cybercrime. However, express kidnapping is generally seen as “physical” theft rather than from fraudulent transactions:

• Fraud requires unlawfulness, misrepresentation, intent, and prejudice. Put another way, fraud involves trickery and deception
• Theft involves an act of appropriation, a certain type of property, unlawfulness and intention to appropriate. Put another way, theft involves someone taking your property or money without your permission (often by violence or force) or without trickery

In express kidnapping, victims are forced under duress to provide access to their bank accounts, resulting in unauthorized transfers. This scenario aligns with the definition of theft rather than fraud, which is why some insurers may not cover these incidents, particularly if their focus is on fraud protection type insurance policies.

General Risk Mitigation Strategies

To protect yourself and your business from express kidnapping, consider the following strategies:

•  Awareness and Education : Stay informed about the locality of express kidnapping risks and educate employees about potential threats.
• Travel Precautions : Take extra care when traveling, especially in high risk areas.
• Insurance Coverage : Consider specialized kidnap and ransom insurance policies that cover express kidnapping incidents.
• Crisis Management Plan : Develop and regularly update a crisis management plan for potential kidnapping scenarios.

Banking Risk Mitigation Strategies

To protect your financial accounts, including access bonds, from unauthorized access, in general and during an express kidnapping situation, consider implementing these banking measures:

• Two Factor Authentication (2FA) : Enable 2FA for all banking transactions, requiring a second form of verification beyond just a password
• Transaction Limits : Set daily transaction limits on your accounts to minimize potential losses
• Biometric Security : Use biometric authentication methods like fingerprint or facial recognition for account access
• Separate High Value Accounts : Keep your access bond or high value accounts separate from your daily transaction accounts
• SMS Alerts : Set up SMS notifications for all transactions to quickly detect any unauthorized activity
• Offline Authorization : For large transactions, say anything over R100 000 or changes to account settings or adding of recipients, require in person verification at a bank branch.
• Regular Account Monitoring : Frequently check your accounts for any suspicious activity.
• Secure Banking Apps : Use official banking apps that have additional security features rather than accessing accounts through web browsers
• Virtual Cards : For online transactions, use virtual card numbers that have low payment thresholds and that can be easily canceled or changed
• Limited Funds Strategy : Keep only enough money in your transactional account for immediate expenses. Store the rest in a notice account with a 7 day or longer withdrawal period
• Decoy Apps : Create decoy banking apps with limited funds to use in public

Insurance Solution

Chadwicks has access to specialized markets that offer Kidnap and Ransom cover, including Express Kidnap cover. Cover is risk profile dependent and Express Kidnapping is sub limited.

Finally, as express kidnapping continues to pose a significant threat in South Africa, it’s crucial for both businesses and individuals to stay informed, take preventive measures and implement robust banking security measures to mitigate the potential risks and financial impacts of this crime. By combining awareness, security protocols and specialized insurance cover, individuals and businesses can better protect themselves against this growing threat.