Fraud targeting mobile money agents in Kenya rises as use of service grows

JAN  21,2014.


By Bedah Mengo NAIROBI (Xinhua) -- The fight to eliminate mobile money fraud in Kenya is far from being won as fraudsters devise new schemes targeting agents and subscribers.

The tricksters have stayed ahead of game, coming up with new schemes to defraud mobile money agents and subscribers once their older tricks are known. The result is that mobile money subscribers and agents continue to fall prey to the fraudsters scattered in all parts of the East African nation.

Initially, a fraudster would call a mobile money agent and pretend he works with a telecom offering the service and thus the firm was carrying out routine checks.

He would then seek details about the agent’s account, including the PIN number. The cheat would afterwards transfer cash from the agent’s account to his and later withdraw the amount.

Those targeting mobile money subscribers would send a text- message purporting to have transferred cash from their account. They would then call the person and plead with them to revert the cash.

These tricks that saw agents and subscribers lose cash to the fraudsters came to the fore, with telecoms warning mobile money users to protect their passwords and shun calls from people purporting to be their employees.

The awareness helped curb mobile cash fraud, but the swindlers have now come up with new tricks mainly targeting the agents.

So brazen have they become that instead of making calls from far and pretend to be working for Safaricom, Airtel, Yu or Orange (the four telecoms in Kenya), they walk to the agents like any other customer and execute the con schemes.

Fredrick Mula is a mobile money agent in Komarock on the east of the capital, Nairobi. Two days ago, a man walked to his mobile money shop and asked to deposit 58 U.S. dollars in his phone account.

As demanded, Mula asked him for his phone number, identity card and the cash before carrying out the transaction.

“He complied with all the requests, but after keying in the details and depositing the money in the phone number offered, Mula realized the money had gone to a different person,” he recounted.

The name of the account where he had deposited the cash was not the same as the one on the identity card he was given.

“When I told him, the man appeared surprised and asked me to confirm the phone number I had deposited the cash. He said I had missed the last digit,” said Mula.

That meant that Mula had made a mistake, therefore, he had to reverse the transaction. But as he frantically tried to call the customer care of the telecom that has employed him, the man demanded his cash back.

“I gave him his money and he left, but when I managed to get through to the customer care, I was informed the money had already been withdrawn. That meant I had lost it,” said Mula.

It was not until the next day while talking to fellow agents that he realized he had been conned.

“The man had gone to two other agents in the area and used similar tricks, with the person withdrawing cash on the other end being the same,” recounted Mula, who has now become cautious.

In another scheme, the tricksters approach mobile money agents, and then seek to withdraw cash. They key in a “wrong” agent’s number and withdraw money.

Once the message comes, showing a different agent in another location, they ask the agent to help them reverse the cash by calling customer care.

“However, instead of allowing you to call customer care yourself, they call and let you speak to the telecom’s agent. One then ends up revealing their PIN number to the person who genuinely sounds like a customer care agent. You will later realize all your float is gone,” narrated Hazel Baraka, a Safaricom’s M-pesa agent in the city center.

Several people have been arraigned in courts across the East African nation and charged with mobile money fraud, but this has not deterred others from perpetuating the vice.

The fraud seems to be growing as money transacted through the platform surges. As at November 2013, Kenyans mobile money transactions hit 19.9 billion dollars, surpassing previous year’s figure, which stood at 18 billion dollars, noted the country’s Central Bank.

According to Safaricom, fraudsters take advantage of mobile money agents and users’ ignorance to defraud them.

“Fraudsters are known to use tactics that take advantage of customers. They require you to provide information or do something yourself. To avoid being party to any frauds or scams on M-Pesa, always check your balance, confirmation messages, do not reveal your PIN, watch out for M-Pesa reversals and airtime purchases,” warned Safaricom.

Safaricom chief executive Bob Collymore recently noted that money lost in M-Pesa fraud is less than 1 percent of the amount transacted on the platform, which is over 35 million dollars each daily.

Losses to customers are about 0.002 percent while agent fraud losses stand at about 0.007 percent. According to Collymore, most of the fraud is perpetuated through trickery.

In a 2009 survey on mobile payments in Kenya, FSD Kenya, Consultative Group to Assist the Poor and Central Bank of Kenya found that fraud was a serious concern to M-Pesa agents.

The three most-prominent types of fraud were counterfeit money, customers using fake IDs and issuance of false details. The researchers recommended training of agents.