Online fraud cases in Kenya rose by five times in the 12 months between 2019 and 2020. In 2021 alone, a FinAccess survey found that 47.4% of mobile wallet users lost money to fraudsters. Among them are people who erroneously sent money to the wrong recipients.
The sharp increase in online fraud and scams paints a scary picture for Kenyans doing their best to earn an honest living. It lays bare the care you must take to protect your hard-earned money from the sticky fingers of scammers and fraudsters.
But what if, despite your best efforts, you have fallen victim to a scam? Can you recover money lost to a scammer?
There are a lot of ifs and maybes in the answer, but there’s a chance you can recover your money after being scammed. This article will teach you what to do to improve your chances.
Let’s get started.
In Kenya, liability for losses resulting from scams lies with the customer. Banks are not compelled by law to issue refunds or compensation.
Even though banks do not refund scammed money, they can freeze your account to limit the hit on your finances. For that to happen, you must contact your bank when you discover your account credentials and cards have fallen into the wrong hands.
Depending on the scam, if you notify the bank early enough, you can even prevent the loss of funds. Most people will, however, only know they have been scammed when they get a phone notification of a payment or withdrawal they didn’t authorise.
In other countries, the liability for unauthorised withdrawals, payments, and transfers from your account lies with your bank, even in cases where you were scammed.
Kenya’s consumer protection laws clearly don’t go far enough. A common example is the SIM swap scourge, where M-Pesa users have lost millions of shillings to fraudsters. The situation is so bad scampreneurs have turned some towns into mobile money fraud hubs.
Some of the losses from M-Pesa scams would have been avoided if Safaricom’s systems were tighter, but the telco has been able to avoid taking responsibility, and scammed users are left to pick up the pieces. That some victims are now suing the company shows how much consumers feel the law has let them down.
To understand why banks and companies like Safaricom are reluctant to compensate victims of scams and mobile money fraud, we have to separate scams from fraud.
Scams are a form of fraud where you are deceived into authorising a withdrawal or transfer from your account, otherwise known as financial theft with your permission. From the bank’s perspective, they can do nothing to protect you if you are careless with your PINs and passwords.
So withdrawals and transfers from your account by scammers are technically authorised by you even if you were tricked into it. Unfortunately, this is how many people lose money to fraudsters in Kenya.
Fraud is a more serious crime where money is stolen from your account without your knowledge or participation. An example is when someone steals your credit card and uses it to buy things online. Banks regard it as financial theft without your permission.
Sadly, in Kenya, banks are not obligated to refund money lost in fraud either.
It is not hard to see why the law does not compel banks and mobile money services like M-Pesa to refund victims of scams. People are often tricked into divulging confidential information through social engineering and other tricks.
Scammers then use the PINs and passwords you unwittingly divulge to them to access and steal money from their accounts. So, technically, these are victims of scams, not fraud. With simple precautions and care, they could easily protect themselves.
The chances of recovering your money after being scammed depend on the steps you take after discovering you have been scammed and how soon you realise you have been scammed.
M-Pesa SIM swap fraudsters, for example, clean victims’ mobile wallets so fast that many victims barely have time to act. But withdrawing money from a person’s bank account cannot be done as fast as it may often mean visiting stores to buy with the victim's card or moving between ATMs withdrawing money.
Your best chances of recovering your money after you have been scammed rest with the apprehension and conviction of the scammer. Instead of the bank, they would repay the money they stole from you.
Still, with most scams, time is of the essence. You have to act fast by taking the following steps:
Many people feel embarrassed to report cases where they have been scammed. Usually, people are ashamed they let their guard down and could be manipulated so easily, feelings made worse by society’s tendency to blame the victim in such cases.
This, though, is not the time to lick your wounds and feel embarrassed. Note every detail of the scam, including the number the scammer used to phone or the email or text message they sent you. This is important information that the bank and the police will ask for and may help apprehend the scammer.
Many people are alerted to unauthorised activity in their bank accounts by payment alerts they receive on their mobile phones. Contact your bank immediately and tell them to freeze funds in your account. Don’t wait a second longer.
With SIM swap fraud, for example, when you realise your phone suddenly does not connect to the network, contact Safaricom immediately, especially after you have disclosed confidential information to a stranger.
M-Pesa fraudsters have developed the devilish practice of taking Fuliza overdraft loans with victims' accounts and then moving that money to another account. This is after emptying the account first.
The fraudster needs time to take money out of your M-Pesa, request a Fuliza loan, and then transfer the loan money to another account. So there is a chance you can instruct Safaricom to freeze your account before the scammer can, for example, move the Fuliza loan money to another account.
After you notify your bank that there’s been unauthorised access to your account and they have frozen your balance, they may ask for a police report when it comes time to unfreeze it.
If the scammer used your card to buy something online, you can request the bank to institute a chargeback procedure. If the merchant challenges the chargeback, you will need to produce a police report that shows you reported the crime.
There are also chances the scammer will be apprehended for another scam. If you suspect and can prove they are the same person that scammed you, a police report will help support your case against them.
So it’s critical that you report a scam event, even when you feel the chances of recovering your money are slim. Reporting a Safaricom number that is used to scam people is also a good exercise in social responsibility. That number can be removed from the network, saving a few people from being scammed.
If you are unsure how the scammer accessed your bank or mobile money account, they may have more of your confidential information and private data.
The fraudster may have hacked your phone or computer, which means they possibly have access to your social media and other accounts. You must change passwords for all your accounts, but you may want to do so from a different device than you normally use.
At the top of the article, we shared Kenya fraud statistics showing you are at higher risk now than ever. In case your bank has not reminded you, the security of your account is your responsibility.
Truthfully, the success rate of recovering money after a scam is low. The nature of financial scams in Kenya makes it very hard to catch scammers.
Many M-Pesa frauds, like SIM swaps, are phone-not-present scams. This means the victim never meets the scammer or loses their phone and will not recognize them even if they come face-to-face.
Your only realistic chance of recovering your money after being scammed is with the scammer's arrest. Seeing how hard that is with mobile money fraud, you are best advised to safeguard your confidential information.
You should never share your PINs with anyone, even people who call you purporting to be from your bank or Safaricom. If you get such a call, report that number to the police and the telco the number is registered to.
Many credit cards no longer require a PIN when used to pay for things in many brick-and-mortar retail stores. They certainly don’t require a PIN to authorise online payments, which means the person holding it at any time can use it to pay for things.
If you suspect that you have lost your Mastercard or Visa credit card, log into your account and immediately freeze it. Speaking of losing your Visa or Mastercard, if you do a lot of your shopping online, you should consider getting a virtual Mastercard or Visa card and moving your funds there.
Because it is not physically existing, a virtual Mastercard or Visa card cannot fall into the wrong hands unless you share its details. You can deactivate it and request a new one at any time.
With an IntaSend account, you can request a virtual Mastercard or Visa card in minutes. Sign up for an IntaSend account and transact easily and securely, pay and get paid from anywhere, and do more with your money.