Treasury beefs up security after R377k is stolen from bond investor

SA Retail Bonds are sold by National Treasury as a ‘safe’ way for ordinary South Africans to invest, but one investor decided to do a random check to see how his portfolio was doing and discovered, to his horror, that the account had been cleaned out of R377 000.

“I randomly checked my RSA Retail bonds account only to find that my details had been changed on the account. After many months trying to rectify this issue, I have found out that R377 000 was stolen from my account,” says Theesan Vedan, the victim of the theft.

National Treasury confirmed to Moneyweb that the funds had been cleaned out of the account and says it is investigating “the circumstances surrounding the alleged fraudulent withdrawal of the investor’s funds”.

“The outcome will determine whether compensation should be considered,” it says in its response to Moneyweb.

In an earlier email to Vedan, Treasury confirmed that R377 000 was withdrawn from his account in July 2024.

ALSO READ: Former FNB employee nabbed for stealing almost R37 million from dead client

What happened?

What appears to have happened is that someone impersonating Vedan sent a message from an unknown email address to National Treasury requesting a change to the details on his account and gave a new bank account for the receipt of payouts.

Vedan assumes Treasury changed the details without double-checking with him. Soon after the account details were changed, it seems a request was received to liquidate the investment and pay out to the fraudster.

“I am lost for words on the total amount of negligence and lack of security features these retail bond accounts have,” says Vedan.

Treasury says it recently appointed a new systems service provider to enhance the system’s security and processing features, such as email and SMS verifications. As a further security check, the RSA Retail Bonds team will contact investors by phone to verify all transactions prior to processing.

Vedan, currently out of the country, says he first invested in SA Retail Bonds in 2013 on the basis that these were advertised as “safe” investments backed by a capital guarantee from no less an entity than National Treasury with a 10% return over five years. They have become a popular avenue for retail investors, with a minimum investment of R1 000, with no charges or commissions and returns backed by the SA government.

ALSO READ: ‘Expanded looting’: Civil servants steal R14 million from EPWP funds

Vedan periodically checked his account and was happy to see his investment paying out monthly interest as advertised.

The capital of R377 000 was accurately reflected in his account in May 2024, when some of his bond investments matured, and he asked that they be reinvested. It was on a subsequent check-in in August 2024 that he realised the account had been emptied.

He immediately contacted National Treasury’s head of retail bonds for debt operations, Dikeledi Moja, who confirmed that the funds were withdrawn from his account in July 2024. Moja also confirmed that an investigation was underway and promised to respond to Vedan in due course.

“I don’t understand how they [National Treasury] processed a change of investor details without checking any documents,” says Vedan.

“I sent them a letter of demand, which expired on Thursday, so I will consult my attorney on the way forward. I also have asked them for the communication from the ‘impersonator’ – which they have not shown me any proof of.”

SA Retail Bonds were launched in 2004 as a way for retail investors to earn inflation-beating or fixed-interest returns. The current rates are between 5.5% for an inflation-linked three-year bond and 10% for a five-year fixed-rate bond.

ALSO READ: Bank employee accused of aiding imposter in R2.2 million scam

National Treasury’s response

Moneyweb wrote to National Treasury for its response.

It replied as follows:

Security measures:

National Treasury has recently appointed a new systems service provider who will be enhancing security and processing features of the system such as email and SMS verifications. In addition to the withdrawal process outlined below, the RSA Retail Bonds team will contact investors (by phone) to verify all transactions prior to processing.

A change of investor details form should be completed by the investor including proof of residence, bank stamped proof of banking details and a certified ID copy not older than 3 months.

Recourse for the investor:

The National Treasury is currently investigating the circumstances surrounding the alleged fraudulent withdrawal of the investor’s funds. The outcome will determine whether compensation should be considered.

Investigating the matter:

National Treasury has received all the required documentation to conduct the investigation. The investor will be notified of the outcome of the investigation once finalised.

This article was republished from Moneyweb. Read the original here.