Kenya’s leading Telco, Safaricom, has teamed up with local banks to combat rising cases of SIM swap (SIM replacement) fraud that is wiping Kenyans’ mobile money and bank accounts clean.
Safaricom claims they have developed an Application which offers offers banks a free monthly quota of checks and a premium tier for extra checks above the free quota for them to verify SIM swaps.
The Application Programming Interface (API) allows banks to ask questions including when the customer’s SIM card was last replaced.
The Peter Ngegwa led Telco argues that this information will enable banks to take quick action against fraudulent transactions.
Mr. Ndegwa has admitted that case involving mobile money fraud are increasing and affecting Kenya’s fintech sector. The fraud is accompanied by a dangerous threat to customers and fintech operators.
“It is therefore necessary for different players to partner around innovations that protect customers and their funds to safeguard the gains made.
“At Safaricom, we have developed SIM-Swap-Check and ATM Vicinity Check solutions that we have made available to banks to empower them to reduce fraudulent transactions.” Ngegwa said.
SIM Swap Fraud is one of the many mobile money-based frauds that has become rampant under Safaricom’s watch. Scammers find it easy to access people’s mobile money accounts like M-Pesa and many digital banking and lending apps.
But Safaricom’s response is the development of (API) which comes after businessman Abdi Zeila filed a class action suit against them and the Communications Authority of Kenya (CA) over frauds committed in October 2022.
They expect app to make it possible for victims of Sim swap fraud to lay out their grievances and have them (Safaricom) held liable for any losses.
Safaricom’s loop holes were exposed by the case of one Peter Mwanzo, the police officer in charge of Kasarani police division, who told the court how he was conned a whooping Ksh600,000 by a SIM swap gang.
“Within less than six hours Sh597,100 had been transferred from my Equity Bank account to my M-Pesa account and later sent to a number unknown to me and withdrawn in Mulot, Bomet County,” he said.
The Criminal intelligence Unit and grilling of Safaricom staff revealed that his Sim card been swapped.
“Someone used my Sim card remotely. This is madness and it seemed easy for the third party to use my Sim card,” he testified.
The Telco says it has rolled out an “ATM Vicinity Check” technology that will help banks ensure that cash withdrawals will only be conducted if the transacting customer is visible to the machine.
They can also withdraw cash from a victim’s account using M-Pesa but their new solution is strictly meant for ATM transactions and identifying the account owner’s physical location, making it tricky for fraudsters to execute their schemes.
