How Accidental Mobile Transactions Cost Kenyans A Lot Of Money: KNBS Report

Generally, internal fraud made up the most prevalent cases of money loss, with Savings and Credit Cooperative Organisations (SACCOs) being the major culprits at 75.1 per cent, compared to a mere 10.1 per cent via external fraud, findings that, in a way, point an accusing finger to the internal workings of SACCOs.

Pension schemes were also a notorious form of money loss, with 66.1 per cent via internal fraud and 14.6 per cent external fraud, outlining how Kenyans have fallen prey to conmen while relying on pension schemes.

A pension scheme is a type of long-term savings plan where an employee or worker can save regularly throughout their work life with an expectation of a refund once they retire.

"Regarding money loss, respondents cited various incidences. Internal fraud in SACCOs and pension schemes was the most prevalent at 75.1 per cent and 66.1 per cent, respectively," read the statement in part.

Banks were not spared. 56.5 per cent of Kenyans reported losing money through that channel through internal fraud compared to 19.6 per cent via external fraud. Others cited accidental send, agent fraud and genuine reversal.

46.1 per cent of respondents reported that they lost money through Micro Finance Institutions (MFIs). According to the victims, internal fraud at the MFI led to a massive loss of funds compared to 25.9 per cent who blamed it on external fraud.

Kenyans who depend on mobile banking systems were not left behind, 37.9 per cent of Kenyans who save through mobile banking reportedly lost their money. The victims claimed that they lost their money as a result of internal factors and external factors.

Two weeks ago, a report by the International Criminal Police Organisation (INTERPOL) revealed how Kenyan hackers reportedly made away with Ksh1.1 billion in a massive cybercrime operation this year. A probe conducted by the organisation between September 2 and October 24, 2024, revealed how the hackers stole the funds through fraudulent scripts after altering the banking systems' security protocol.

According to Interpol, after stealing the money, the hackers promptly redistributed it to companies in three countries including the United Arab Emirates (UAE), Nigeria and China. The monies were also channelled to digital asset institutions offering trading and financial services regulated in multiple places. The investigations led to the arrest of almost 24 people.

During the probe, private sector partners, including Internet Service Providers, played a vital role by sharing intelligence, supporting analysis, and disrupting criminal activities, which consequently led to the arrest of the suspects.

The report further revealed that during the same period, security officers across 19 African countries arrested 1,006 suspects and dismantled 134,089 malicious infrastructures and networks.

The arrests dubbed Operation Serengeti, targeted criminals behind ransomware, Business Email Compromise (BEC), digital extortion and online scams. In the operation, more than 35,000 victims were identified, with cases linked to nearly Ksh24 billion in financial losses worldwide.