Capitec blocks R699 million in fraud

Capitec stopped more than 394,000 fraudulent payments over the course of one year, preventing R699 million in potential fraud losses.

Between July 2025 and June 2026, the bank flagged transactions across 113,410 of its clients, blocking over 131,000 suspicious beneficiary accounts in the process.

In addition, the bank identified and shut down more than 64,000 mule accounts that had been used to move illegally obtained money.

These figures were revealed in a post by the Capitec Group’s Chief Information Officer Andrew Baker, which he made to his personal website.

Baker attributed Capitec’s increased success in fraud prevention to a new strategy which the bank has implemented, which he termed “scammernomics”.

“For years, banks fought fraud the same way,” Baker said. “Build higher walls, catch more transactions, block more accounts.”

“It felt effective, but it barely touched the criminals actually running these operations, because a blocked account just gets replaced.”

According to Baker, a mule account can cost a criminal syndicate less than R500 to acquire, making the blocking of an account nothing more than a rounding error for them.

The blocking of three hundred empty mule accounts would, for example, inflict a loss of R150,000. Many of these syndicates turn over considerably more than that, according to Baker.

Instead, he said Capitec began to view these syndicates more along the lines of businesses with a cost base, working capital, supply chains, labour forces, and returns on investment.

“It has acquisition costs, operational overheads, staff who need to be paid and managed and occasionally distrusted, and a payback period that determines whether the whole thing is worth doing at all,” Baker said.

“The most effective thing a bank can do is not simply to make the wall taller, because the wall on its own only ever changes where they attack. The most effective thing a bank can do is to make the business unprofitable.”

How “scammernomics” works

Baker explained that “scammernomics” revolves around the idea of attacking a fraud syndicate’s margins, rather than just blocking its transactions.

This is done through making mule accounts an unreliable tool for conducting fraud, deterring them from simply acquiring new accounts when an old one is blocked.

To do this, Capitec uses a technique which Baker dubbed the “ghost stop”, which delays blocking the mule account until a considerable amount of time and capital has been invested in it.

“The entire purpose of the control is to ensure the funds cannot leave, so that they can be secured and returned rather than converted, layered, and lost within minutes,” Baker said.

“What changes is not whether the money is protected, but when the criminal finds out, and the answer is late enough that the discovery is expensive.”

In contrast to blocking hundreds of empty, easily replaceable accounts, the “ghost stop” allows Capitec to prevent victims’ money from being extracted at the moment it turns into revenue.

For example, denying R40,000 from being extracted by a syndicate is the equivalent of the acquisition costs of eighty replacement mule accounts, according to Baker.

Additionally, Baker said the money which can now no longer be moved by the syndicate can be safely returned to the victim.

“A payment that is converted, layered, and dispersed across a chain of accounts within minutes is gone, and what follows is an investigation, a report, and an apology,” Baker said.

“A payment that is immobilised where it landed is a recovery, and a recovery is a phone call telling a person who had already accepted the loss that their money is being returned to them.”

In addition to the “ghost stop”, Capitec also employs a technique which Baker called the “landmine selfie”, which periodically captures selfies of the user at points of transaction.

This allows Capitec to verify whether the person using the account is the same one who created it, allowing them to catch out people who have sold their accounts to act as mules.