Business

Eskom Contains Prepaid Electricity Fraud After Major Vending Breach

Published

2 days ago

September 18, 2025

Chiraag

Eskom prepaid electricity fraud, ghost vending scam, Eskom vending breach, smart meter rollout South Africa, Eskom revenue protection, Joburg ETC

Billions lost to “ghost vending”

Eskom has confirmed it has largely contained one of the most serious security breaches in its history, a flaw in its Online Vending System (OVS) that allowed billions of rands worth of fraudulent prepaid electricity vouchers to be issued.

The breach, first disclosed in the utility’s 2024 financial results, exposed Eskom to staggering losses. In that year alone, electricity theft, including illegal tokens and bypassed meters, cost the utility around R23 billion in lost revenue.

The fraudulent activity, known as “ghost vending,” enabled corrupt insiders to generate bulk electricity tokens illegally. These tokens were then sold off the books, creating a black market for stolen electricity.

Clearing up confusion

Recent reports suggested that the problem was even bigger than Eskom admitted and that the fake tokens could also be used on municipal prepaid meters. Eskom has strongly denied this. The utility insists that its tokens only work on meters registered within Eskom’s own system.

“Municipalities operate independent vending systems, which are not integrated with Eskom’s platform,” the company clarified. This means Eskom-generated tokens cannot be applied to municipal meters and vice versa.

Even so, the scale of the fraud forced Eskom to act quickly. The utility says it has now reduced ghost vending to “very low levels” thanks to a layered security approach that includes new technology and tighter operational controls.

Smart meters and new safeguards

One of the biggest defences has been the rollout of smart meters. These allow Eskom to detect suspicious transactions almost in real time, giving investigators the chance to act before losses spiral. Combined with upgraded physical and cyber security, the system is now much harder to manipulate.

Some employees implicated in the scheme have already been dismissed, with cases handed over to law enforcement. Eskom has promised to cooperate fully with authorities to ensure accountability.

At the same time, it has introduced early detection tools and is accelerating the development of a new, secure vending platform to replace the current OVS.

Restoring trust

CEO Dan Marokane said the interventions are already paying off. “Reducing vending fraud to very low levels demonstrates that our interventions are effective. We are protecting revenue, restoring trust, and ensuring our customers receive a secure and reliable service.”

For South Africans, the news offers some reassurance that prepaid electricity, relied on by millions of households, is more secure today than it was just a year ago. But it also highlights how vulnerable critical infrastructure can be to insider threats and how quickly trust can erode when billions are siphoned off.