Aug 4, 2021

Mawazo Writing Africa

Writing about the main

Kenya’s financial services firms prime target for fraudsters

According to a new survey.

This development is likely to startle depositors whose confidence is due to the collapse of three banks in quick succession and an increasing number of lenders who violate government regulations violated, badly shaken guidelines on liquidity and capital adequacy.

Preliminary results of a survey by credit reporting agency TransUnion Africa show that the identity information that people fill out in guest books when they place like Such offices, schools, businesses, buildings and various organizations have become soft targets for scammers to steal your money.

The survey of TransUnion’s digital fraud solution called TrueValidate shows that Keny a bank loses over Ksh 13 billion ($ 121.49 million) each year to fraudsters through identity theft and credit stacking.

Identity thief stolen is when scammers use stolen identities to wipe customers out. Bank accounts or mobile wallet accounts during credit stacking is when fraudsters with stolen identities take out multiple loans.

According to the survey, identity theft has become more important in the financial and telecommunications sectors. < / p>

Most common theft

“It is mainly the case when someone steals your ID to either open an account or to access your account and get a loan on the other hand. We see a lot of what is common is taking out Mshwari or Tala loans with stolen ID information, “said Billy Owino, the company’s chief executive, to The EastAfrican .

“We started watching identity theft in 2019 when people turned to customer service and said they were denied a loan somewhere because the bank says they have a loan default from We realized that a lot of identity theft is happening and continuing, especially in the area of ​​mobile lending, where someone steals their identity just to open an account on one of the fintech platforms. ”

TrueValidate’s advanced intelligence and global fraud reporting network help companies discover anomalies, assess risks and safely identify good consumers.

“There are many places where you pick up the guest book, sign it and provide your personal information like ID number and your phone number. If these details get into the hands of the scammers because we never know how these books will be handled, it will be very easy for them (scammers) to either do a SIM swap or create another new account, “Owino said / p>

According to the survey, Kenya’s financial services sector with “True Identity” recorded the highest increase in the proportion of suspected fraud cases of 150.72 percent in the four months ended April 30 of this year (2021 ). “Theft” is the predominant method used by fraudsters to kill.

Sector by sector

Gambling followed (48.87%) being the most common “Policy / license violation” and telecommunications (36.77 percent) fraud types, with “true identity theft” being the most common type of fraud.

Travel and the leisure sector saw growth of 12.58 percent for suspected fraud, with credit card fraud dominating, while municipalities recorded an increase of 10.54 percent. This applies in particular to suspected fraud, with the type of fraud most frequently being “profile misrepresentation”.

The retail sector saw the rate of suspected fraud decrease by 13.85 percent, although” advertising abuse “is the key form of fraud in the sector.

Im In 2019, a survey by the Financial Sector Deepening Trust (FSD) Kenya showed that users of mobile money face significantly more challenges than users of regulated financial services such as banks and mobile banks, with almost 30 percent (over 5 million users) suffering money loss or fraud, mainly through false reports or phone calls.

On the other hand, three percent of bank users (around 220,000 consumers) also stated that they had lost money from their accounts Changed the way people save, borrow, and transact. While transactions may still be dominated by cash for cost reasons, there are signs of increasing digitization, ”according to the survey entitled“ Inclusive Finance ”.

Trillion dollar industry

“Savings are now formalized through mobile banking and the digital wallet, which offers a secure store of value that is easily accessible in times of need.”

In 2019, 54 percent of Kenyans saved on their mobile wallets, up from 43 percent in 2016, with the population using digital app loans increasing from just over 0.6 percent to seven percent, while the number of mobile users Banking credit rose from six percent to nine percent.

A report by global consulting firm McKinsey & Company shows that financial crime is becoming more sophisticated and electronically sophisticated with the digitization and automation of financial systems has become more impersonal.

In 2018 the global economy The omic forum noted that fraud and financial crime are a trillion dollar industry, and reported that private companies a year alone Spent approximately $ 8.2 billion on combating money laundering (AML) in 2017.