Even as mobile money transactions in the last six months ending March 2022 hit an exciting record Shs. 145.6 trillion, the misery inflicted on subscribers and dealers is far reaching.
Also in a related development, the value of mobile banking transfers and internet rose by 146.1% and 828% respectively, according to financial statistics.This comes against the backdrop of growing uproar from the public over the safety of mobile banking and transfer systems, with increased reports of fraud taking center stage.
As per statistics supplied by the Bank of Uganda, there is increased demand for digital channels, and this is driven by the favorable policy and regulatory environment, coupled with shifts in consumer behavior, mainly precipitated by COVID-19 measures and the aftermath economic recovery.
At the height of COVID-19, and the subsequent lockdowns, commercial banks and mobile money companies reduced charges on mobile phone-based trade dealings to favour the evasion of physical outlets, as a way of prompting social distancing.
Summing up mobile money users, the grand total grew to about Shs.30 million, with MTN reporting a growth of 8.5 percent in the last six months ending March 2022, to 15.9 million active accounts, according to their financial statistics.
Inspite of these growth figures, many users have fallen prey to imposters and other fraudsters, who spend sleepless nights crafting new ways of stealing money from accounts.
Failure by different subscribers to jealousy safeguard their pins codes, and being so naive, coupled with gullibility makes them fall prey to scamming, according to some telecom companies.
Companies maintain that they have always advised their clients to make their pin codes a secret, and it is also recommend that subscribers set their codes using the digit combinations that are hard to guess by the fraudsters, but there is also a risk of forgetting the pin, due to its complex nature.
Telecom companies also urgue that they do supply official numbers, which subscribers should call on for any emergencies, or the other way round.
“If our customers follow the above 3 golden rules, nobody can have access to their Mobile Money wallet without the customers entering the 5-digit secret PIN into their phone themselves explicitly or unconsciously,” says MTN in a statement.
Even as these measures are put in place, frauders continue to inflict heavy losses on mobile money operators, and local subscribers, for instance in March, an unnamed mobile money user claimed that they had lost Shs. 2.7 million off their account mysteriously.
MTN subsidiary in Uganda, however mantains that any suspicious activity detected on the mobile wallet should be reported immediately to the company, before any action is taken by the subscriber. This has to a smaller extent been adhered to.
In a related incident, a video recording went viral on social media in recent months, in which an Airtel subscriber, a one Bekenya Henry revealed that he lost more than seven million after his phone, on which he used to make mobile money transactions went missing.
Bukenya says he immidiately took action, blocked the SIM card and later on renewed it, only to find zero shillings on his account.
He wondered how the fraudster got to know his codes to access his account, or the National Identification Number (NIN), to have his phone number unblocked without his knowledge.
Airtel Uganda acknowledged receiving the complaint in November, and the actions taken include blocking his account to investigate the reports.
It was later discovered that there was insider connivance that enabled the fraud to happen and that the culprit was discovered and “delt with accordingly”.
Bukenya was later compensated in February 2022, with unspecified amount.
Other cases of fraud involve the fraudster initiating a withdrawal process, through strategic deception, by forging messages that are sent to targeted numbers, indicating erroneous receipt of funds on ones account.
The fraudster then hastly calls the targeted subscriber, claiming money was erroneously sent to them, and requests reversal, through authorising the agent to effect such a move.
In instances where the targeted subscriber and the agent are not on high alert, they end up sending money to the fraudster, which is not reflected on the account of a naive client.
However, regulatory bodies like Uganda Communications Commission (UCC) and Bank of Uganda (BoU) maintain that most of the cybercrime in the mobile money industry is because of people’s low digital literacy.
In that respect, UCC noted it was collaborating with mobile money operators and anti-fraud companies, in an attempt to tackle the issue.
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