How billions are lost in mobile money fraud

At least 100 mobile money users lose money every week, some in millions of shillings, police statistics show.

MTN Mobile Money, Orange Money, WaridPesa, Airtel Money and M-Sente are some of the mobile money services affected.

A source in the police public relations office admitted that they are struggling to catch up with the criminals behind the scam.

“Because of so many unregistered Sim cards, it’s very hard to track suspects and arrest them. Other conmen use fake details to register Sim cards used in mobile money fraud,” the source said.

Fraud at work

Timothy Arinanye, 32, a mobile money agent lost Shs 3.5m to a conman last Wednesday. He says that a client with telephone number 0783860927 wanted to deposit Shs 356,600 onto his account.

“When my employer gave this conman the phone to put the pin number, he transacted Shs 3,566,000 and sent it to his phone. We realised it in the evening when balancing the sales,” he said.

Arinanye adds that when he called the number, the owner denied receiving it and switched off his phone. The case is registered at police under case Ref.SD 17/05/09/2013.

“When I contacted MTN to block the money which was deposited on that account, they told me they can’t do it unless I get a court order since the suspect is also their client. By the time I got the court order, the money had been withdrawn and the phone switched off. It will never be recovered,” says Arinanye.

With a bank loan to clear and no more start-up capital, Arinanye’s business collapsed.

Pin code

In another trick, conmen master the agent’s pin code by giving him an invalid number which he repeatedly dials while entering his code. When he gives the fraudster the phone to type in the correct number, he sends all the agent’s money to himself and disappears. The agent realises later that he was robbed.

Another victim, Cissy Namayanja, says she received a call from 0704300989 and a man claimed he had credited her account by mistake.

“I checked my account and there was no credit. After like two minutes, the person called again inquiring whether I had received a message. I realised the message had just come in saying, ‘You have received 850,000’.

He said that he was an agent who was sending money to a client and that I should reverse the transaction from my side. He asked whether I had any money on my account to which I said yes. He proceeded to give me a code and finally told me the transaction was hanging since I needed more money on my account as transfer charges.

The message I got on the screen meant nothing and this guy never credited my account in error but wanted to access what I had using the code he provided. I don’t know how those messages work but I didn’t even think of checking my account balance first. I think the screen message I read facilitated him to withdraw the money,” Namayanja says.

Other fraudsters go to mobile money agents while driving expensive vehicles and pretend to be rushing. They ask for a deposit of huge amounts, say Shs 3m. After sending, they give the agent fake currency and distract him so that he doesn’t realise the fake money. By the time you realise it is fake, the fraudster has vanished.

Network busy

The thugs also take advantage of network problems in an area to deposit money on their phones. When the agent gives them his phone to enter the mobile money pin code, they send the money quickly but delete the sent message and tell the agent that indeed the network is off and disappear without paying.

Armed with a fake message that shows funds on the phone, a fraudster can pretend to be in a rush and ask the agent to give him cash but retain the phone to withdraw the money he has taken when the network resumes.

Conmen also use the MTN back-up customer service for contacts or Sim card registration by pretending to be employees backing up or registering Sim cards. After swapping your card with another, they use it to commit crimes. When police tracks the line, an unsuspecting victim is arrested.

Fraudsters are also targeting money transfer agents such as Western Money Union and Money Gram.They hack emails and get all the details of the sender and receiver. They forge the identification of the receiver and then withdraw the money. By the time the rightful owner goes to claim the money, the fraudster is targeting his next victim.

Telecoms employees

Many mobile money users don’t know how to check the balance on their phones and think receiving a message is actual money sent to them. Some thieves are now claiming to be priests or pastors who erroneously sent money meant for orphans.

Many people do not know how to send back money from their phones to another person. Some rely on agents to help them send money and even disclose their passwords to agents. They then realise later that no money has been sent to you and yet you have already sent them your own money.

According to police, some of the fraudsters are former employees of telecom companies, who connive with current employees to withdraw money from accounts with huge sums.

“We are investigating a case where a woman left Shs 100m on her mobile account at night. By morning, the money was deposited on a different mobile account and withdrawn,” our police source told us.

Mobile money agents are the biggest target of fraudsters posing as customers.

“We get so many cases of such victims everyday but the mobile telecom companies have failed to cooperate with police and give us particulars of the suspect immediately to act fast and arrest him. Getting a court order to block the phone takes two to three days and by this time the money has already been withdrawn,” the source explains.

“The telecom companies can’t give police the particulars of the suspect unless they apply for a mobile money printout statement which takes between five days to two weeks to get. It costs Shs 30,000 at MTN and Shs 20,000 in other telecom companies. It takes long to get the printout because most of the times the network is off and there are long queues,” the source adds.

Even with a printout, telecom companies give only the telephone number of the suspect, withholding details such as name and photograph. This makes it difficult for police to track the suspect. He says numbers are registered in abbreviations like WMJG JSM or Tpg TSM. One could be registered as Rose Nabitalo yet the actual owner of the phone is Uthuman Kimalo.

“I don’t see any impact of telecom companies in registering Sim cards if they can’t reveal all the particulars of suspects to police to arrest criminals,” the source adds.

Kampala Metropolitan Police Spokesperson Ibn Ssenkumbi said they want telecom companies and Uganda Communications Commission to freeze the accounts that receive  the stolen money until investigations are completed.

UCC communications manager Fred Otunnu says mobile money will be streamlined with Bank of Uganda under the Financial Institutions Act.

“We shall highlight all the issues affecting the mobile money business to improve services,” he said.
Ronald Lwasa Mpijja, the investigating officer of Mobile Money fraud at Kampala Central Police Station, says their main suspect is one Kenneth Olinawe with telephone number 0777556820.

He said according to their investigations, some fraudsters are in a racket using one phone with different Sim cards to con mobile money agents.

“It has been proven by the mobile money printout which indicates the same serial telephone number used by different Sim-cards in stealing the money. They use one phone to commit several crimes,” Lwasa said.

He added that police are hunting down the owners of telephone numbers used in mobile money fraud.


© 2016 Observer Media Ltd