Mobile Money – the paradox of costly convenience

By Omondi Julius Odera, Kampala, Uganda

Katende Simon, a new mobile money agent, has just lost about UGX 1.5million to a ‘techie’ fraudster.  Having got the service a month ago, the elated Katende received a call from a purported area supervisor prompting him to follow the instructions and dial the codes given because of a ‘reported system upgrade’. By the end of the one minute call, the unsuspecting Katende had transferred all his float cash from his line to the fraudsters’ line.

“It happened so fast and before I could sense danger all my float of about Ugx1, 470,000 was gone. It was heartbreaking and was terrified to the core. I tried to rush to head office and inquire if at all my supervisor was available,” explained Katende. On arrival, he realized that his fears were a reality. All his cash had gone! There was no hope for him because everyone there told him that such cases are on the rise and that even the Telco operator seems helpless.

“You are not alone and neither are you the first to lose cash in a similar case. In fact we are also targeted,” explained one supervisor (name withheld because he is not permitted to speak on behalf of the Telco). “These guys seem to be sharp and plan ahead of us. That is why we advise that all the mobile money agent lines are deactivated from receiving and making calls and are used only for the transactions. That way, the supervisor only calls you using your personal number,” added the supervisor.

Notably Katende is an agent for Uganda’s lead Telco MTN however, according to statistics from Uganda police and other authorities, the fraud cases in mobile money cases cut across all the Telcos including Airtel and Africell.

Katende’s sad tale is not an isolated one because there are several similar cases that either are reported or go unreported. The agents seem to be guarded by the rule of call deactivation of their mobile money lines. However, thise leaves the subscribers or clients exposed to the ‘smart thieves’. The growth in Uganda’s mobile banking has been phenomenal with statistics from Bank of Uganda indicating that the platform had over 21 million registered subscribers transacting over UGX 8.5 trillion by December 2015.

The increasing craze for the service seems to be also working for the techie thieves. This is because more users are not informed of the vulnerability the service exposing them if not well used. These fact can be backed with increased fraudster cases targeting mobile money agents and clients in Uganda and as a result, has caught the attention of the regulator; Uganda Communication Commission. In a brief communiqué to the media, the regulator acknowledged the existence of the problem. The regulator explained that fraudsters are also using SMS messaging platform to steal from unsuspecting subscribers.

Part of the communiqué from UCC read, “The Uganda Communications Commission (UCC) wishes to draw the attention of the public to an emergent trend in the industry in which fraudsters impersonate subscribers with the intent of extorting money from the unsuspecting correspondents of the victims.  This is done using automated online systems largely through the SMS messaging platform.”

Subscribers who have suffered the fraud point fingers at the Telecom firms for their laxity in cooperation whenever a fraud has been committed. Bashir Kakeeto, a Kampala resident, noted: “This is very simple issue if the telecom cooperate but they are simply not willing. Fraudsters are using this loophole to take people’s money.”

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