Several years ago, and going on for a few more years, South African consumers were victims of what was commonly known as the "R99 scam." The scam involved some dodgy businesses who would acquire (possibly through the many data breaches that have occurred in South Africa too) consumers' personal data including bank details and then proceed to load automated and recurring R99.00 debit orders on the bank accounts.
Although this scam would eventually be minimized and almost completely eradicated today, it wasn't after much consumer protests and insistence that something be done. The banks, for years, appeared indifferent.
This made sense because to reverse these debit orders, some of the banks would charge consumers much more than the actual debit order itself. On the other hand, the South African Banking Risk Information Centre (SABRIC) appeared to dismiss the scam as not much more than "a storm in a teacup" and even had a tone of trying to blame consumers suggesting that the R99 scam was not a big problem as compared to consumers reversing legitimate debit orders for "money management" purposes.
To cut a long story short, South African consumers won forcing banks to implement certain measures around debit orders and their reversals and further asking them to identify the criminals behind the R99 scams.
I mention this now almost forgotten scam in South Africa because in Kenya another type of scam involving M-PESA accounts is on the rise. However, in Kenya, the scam appears to take advantage of digitally illiterate consumers.
The aim of the scam, as Jacob Mugendi explains, is "to either get me to send money to a phone number, or to make me authorize an ATM withdrawal and give them the code, which they will use to withdraw money from my M-PESA through an ATM."
More worrying, is that Safaricom and Airtel seem to be non-responsive and taking no action against the scammers. This is similar to the earlier days in South Africa's R99 scam where the banks and regulators were indifferent and mostly ignored consumers.
It is partly understandable that the telcos are relatively unresponsive in solving this M-PESA USSD scam. Part of the problem, similar to the R99 scam in South Africa, is that it is difficult for them as companies to prove that the alleged scammer wasn't known to the customer and the customer merely donated money to them or borrowed them money. After all, the transaction on the telco side would show that the customer sent the money to the alleged scammer.
Having said that, that is not reason enough to dismiss calls by consumers to investigate the scams. M-PESA customers in Kenya need to continue applying pressure on the telcos to investigate and take action regarding the M-PESA USSD scams.
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