Kenyans lost more than Sh17 billion last year to fraud, and mobile phones aided much of the theft. PHOTO | FILE
who said he
wanted to contract him to fabricate a body for his truck. He would pay
him well too, the caller promised, and immediately wired Sh450,000 to Mr
Karanja’s bank account. The transaction was confirmed by the bank,
whose name we are not revealing for legal reasons.
“I reasoned that I’d still retain his Sh370,000, so I sent him the money,” Mr Karanja told the Nation this week.
As
it turned out, he should have reasoned more, because the following day
the bank sent him a message indicating that the Sh450,000 transaction
had been reversed.
CONNED
Mr
Karanja had been conned of his Sh80,000 in the smoothest way possible,
joining thousands of other Kenyans who are losing billions of shillings
annually to mobile phone fraudsters.
This theft is mostly under-reported and
rarely leads to any convictions, in part because the police do not have
the capacity to investigate and successfully prosecute this sort of
cybercrime, and also because banks keep hiding the inefficiencies of
their financial transactions platforms from their clients.
The victims, like Mr Karanja, are left to lick their wounds in agonising silence.
“When I called the bank, an agent informed me that clients have the right to reverse electronic money transactions,” he said.
In
Nakuru, Mary Wambui says she was touched when someone called to plead
that he had inadvertently sent her Sh5,000 on M-Pesa, so could she be
kind enough to send back the money, which was meant for school fees,
less the transaction cost? She obliged without even checking the balance
in her mobile money account, and ended up losing her Sh5,000 in
seconds.
HYENAS
The
cons, who are like a pack of hyenas hunting in the dark, prey on the
ignorance, gullibility and vulnerability of their targets to steal.
Their messages are sent out randomly in the belief that at least one
person will respond. And, often, they hit jackpots.
For
instance, 83-year-old Wangechi Nderitu recently received a message
informing her that she had won Sh100,000 in a raffle competition that
she had registered for, and needed to call a particular number to claim
her prize money.
When she did,
she was asked to send Sh10,000, which would be used to book an
appointment to collect the prize, as well as for other small
administrative matters. She did as asked, and then waited for further
instructions. They never came.
“The
man on the other end went off the network soon after I sent him the
Sh10,000,” recalls the granny from Othaya, Nyeri County.
SECURITY
Questions
abound on the security of mobile money transaction platforms, and also
on the capacity of security agencies to tame the fraud. Mobile phone
users must register their subscriber identification module (SIM) cards
with the service providers, who in turn have the capacity to trace the
movement and withdrawal of money within their networks.
The
con artists are also preying on the emotions of parents by asking them
to send money to pay for the emergency medical costs of the parents’
children, whom they claim have fallen ill while in school.
“They
usually claim that they are good Samaritans in a hospital and urgently
need cash for the children to get admitted,” said Imenti South police
boss John Cheruiyot. “Schools have been forced to issue warnings to
parents over the vice as the fraudsters, who often pose as teachers,
have so much detail about their target children and the schools they
attend.”
CHEAP
The
tricks might appear lame and cheap, but they are a fraudster’s manna
from the dark reaches of the criminal underworld. The criminals have a
ready, fat market waiting for them, sitting within the motherboards of
millions of mobile phones and hundreds of electronic bank vaults like
lame ducks on a wintry night.
The
Economic Survey of 2018 indicates that mobile money transfers totaled
Sh1.76 trillion last year, from about 600 million transactions. Police
records show financial institutions lost Sh17 billion to fraudsters in
2016 and Sh14 billion in 2015, but there is no data on amounts lost
through mobile money fraud.
Police
say the fraudsters are now manipulating victims to reveal the PINs to
their mobile money accounts, leading to their depletion of funds in no
time. Some cases involve deception, use of technology and fake money to
steal from the public and M-Pesa dealers.
M-PESA PIN
“Since
it is hard for them to infiltrate the M-Pesa system, they use
non-technical methods, or social engineering, as it is popularly known.
This involves tricking unsuspecting people into breaking normal security
procedures and manipulating them into, among others, revealing their
M-Pesa PINs,” said Nakuru County Commissioner George Natembeya.
Ms
Mary Nyamoita, an M-Pesa agent in Kivumbini area of Nakuru, says she
receives at least 10 complaints every day from customers who have been
defrauded as they seek to have the transactions reversed. Depositors
giving fake notes is the biggest threat to her business, and traders in
Embu, Mombasa and Narok also said this is a big risk to them too.
Detectives
in Narok last week arrested five people who are believed to be members
of a syndicate involved in SIM card-swapping. The suspects are accused
of stealing millions of shillings from the M-Pesa and M-Shwari accounts
of unsuspecting victims.
The
criminals pose as mobile customer care desks where people with mobile
money transactions hitches are attended to. They then randomly pick
mobile numbers to which they send fraudulent messages purporting to be
original M-Pesa transaction texts.
MOBILE MONEY FRAUD
Nakuru
criminal investigations boss Zachary Kariuki said a man from Baringo
County recently lost Sh2 million to mobile money fraud, which is usually
perpetrated by digital-savvy youth as young as 18 years.
In
Embu, Geoffrey Kamau Maina and Elizabeth Wanjiru Kamau were recently
almost lynched by a mob after giving fake money to an M-Pesa agent. They
denied the charges before Embu Resident Magistrate Samuel Mutai, who
released them on a Sh100,000 bail with a surety of a similar amount, or a
Sh50,000 bond. The case is ongoing.
In
Laikipia, Clement Alumasa was convicted of hacking the M-Shwari account
of Stephen Ouma on March 30 this year and fined Sh150,000 or two years
in jail. He appealed the judgment, and the High Court swiftly threw out
his application.
RECEIVED CALL
His
case was of particular interest because it revealed yet another tactic
that fraudsters are using. Mr Ouma said he received a phone call from a
man who identified himself as Anthony, an an employee of Safaricom.
The
caller informed him that Safaricom had received a complaint from
someone that his cell phone number was interfering with theirs. Mr Ouma
gave Antony his personal details except the M-Pesa PIN.
After
the telephone conversation Mr Ouma’s line went dead, only for him to
later discover that his M-Shwari account was short of Sh120,000. Records
at Safaricom showed the withdrawals were made using a cellphone
registered to Mr Alumasa, who was tracked to Moi University and
arrested.
Reporting by
Joseph Wangui, Isabel Githae, Charles Wanyoro, Ndung’u Gachane, George
Sayagie, Eric Matara, Rushdie Oudie, Lucy Mkanyika, Brian Wachira,
Kalume Kazungu and Fredrick Fadhili
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