Business

MPs to probe how Kenyans lose cash in bank accounts

Tuesday, April 2nd, 2024 09:48 | By
Lawmakers say they have received complaints from severasl customers who lost money through fraudulent withdrawals from their accounts at different banks. PHOTO/Print
Lawmakers say they have received complaints from severasl customers who lost money through fraudulent withdrawals from their accounts at different banks. PHOTO/Print

The National Assembly’s Departmental Committee on Finance and National Planning has 30 days to carry out an inquiry into how telecommunications companies are offering loan services.


Chaired by Molo MP Kimani Kuria, the committee is also set to look into how millions of Kenyans have been losing their money from bank accounts and provide solutions.


Kuria said that if the committee establishes a loophole in law, they will then be recommending the establishment of a legal framework that will protect Kenyans from such incidents in future.


He said: “We have had people lose money from their mobile applications and when this particular matter is raised, it has not been addressed,” he added.


These institutions, the legislator said have the tendency to tell customers to go report at the police station.


“Once this matter is reported to the police and an occurrence book (OB) number is obtained, nothing much is done.”


Financial sector


And added: “As the Committee mandated to oversee the financial sector, we request to conduct an inquiry instead of seeking for a Statement so that we ask all Kenyans who have lost their money in either a bank account, Sacco account, microfinance account or through a mobile application to write to us to address that matter.”


At the moment, telecommunication companies such as Safaricom, Airtel and Telkom among others provide a wide range of services and solutions, primarily mobile, voice, messaging, data, financial and digital services that enable commercial and personal platforms.


The inquiry came after Nominated MP Irene Mayaka raised concerns that telecommunications companies fleece customers through various digital applications such as M-Pesa, digital loan products, Fuliza.

Airtel Money, Airtel Wallet and T-Kash among others have been offering loans using money believed to belong to non-borrowing digital application users, thus engaging in financial business without having been licensed as banks or financial institutions.


She further claimed that, the said companies do not adequately address the SIM swap fraud, which has seen customers lose millions of shillings through scams and fraud targeting their mobile money services.
Mayaka said: “Their customers have been victims of scammers who have been accessing their bank accounts using the victim’s identification details.”


It is against this background, that she asked the committee to undertake an inquiry into how telecommunication companies, through digital applications, have been offering loans using money believed to belong to non-borrowing digital application users, thus engaging in financial business without having been licensed as banks or financial institutions.


The legislator further demanded to know the strategic response and protection measures the telecommunication companies have adopted to address fraud related charges in mobile money services and tackling sim swaps.


Charged on loans


She added: “State the measures that the ministry has put in place to ensure that the interest charged on loans and other credit facilities advanced to customers by telecommunication companies adhere to the law on interest capping.”


Mayaka also seeks explanation as to what regulatory framework the government has put in place to ensure all financial transactions, including loans and promotions transacted through all telecommunication companies are secured from cyber criminals.

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