Malawi Communications Regulatory Authority (Macra) has described mobile fraud across digital platforms, estimated at K120 million a month, as a stumbling block to growing the digital economy.
In his brief yesterday during an interaction with editors and media managers over breakfast in Blantyre, Macra director general Daud Suleman said uptake of digital payment platforms will decline if the issue of fraud is not decisively tackled.
He said Macra was working on a central equipment identification system that will see users register their mobile phone handsets as well as laptops and other gadgets to curb the fraud.
Suleman said: “You will recall that through the identity register system, Macra conducted a KYC [know your customer] programme to register SIM cards. To that effect, only registered SIM cards are in use across the networks.
“However, it emerged that some unscrupulous people would get 100 SIM cards and use on one handset to defraud people. But if we register the gadgets, it will be easy to curb mobile money fraud which claims K120 million monthly.
“If we don’t act, the uptake of digital platforms will be discouraged.”
Currently, the country’s mobile phone network operators, namely Airtel Malawi plc and TNM plc are capable of identifying gadgets that a particular subscriber is using. But Macra as a regulator believes blacklist handsets linked with fraud can be managed better through a central point.
Technological advancements have given consumers more convenience in terms of sending and receiving money or making payments.
However, some fraudsters have also taken advantage of the technology to trick unsuspecting Malawians by either calling or messaging them, advising that they have won prizes and should send either their mobile wallet pin numbers or deposit a specified amount of money to redeem prizes.
In July 2021, the High Court of Malawi Commercial Division found Airtel Malawi plc and Standard Bank Malawi plc guilty of negligence and ordered them to pay K120 million compensation to a customer for losing about K24 million from his bank account.
Presiding judge Ken Manda said it was beyond reasonable doubt that the two companies had a role in the manner the claimant lost his money to fraudsters who cashed cheques from his account in his absence.
The fraudsters cashed the money through an Airtel SIM card swap which was used to confirm cheque withdrawals.
In June 2021, the Competition and Fair Trading Commission ordered First Capital Bank to refund with interest K1.4 million transferred from a client’s bank account due to the bank’s weak and unreliable mobile banking application. The bank was also subsequently fined a total of K1 million.
The Consumers Association of Malawi is on record as having said increasing cases of mobile fraud, including other digital financial platforms, requires consumers to be equipped with knowledge on how to avoid negative transactions.
During yesterday’s meeting, Macra also tackled the sticky issue of broadcasters risking closure for not complying with licence requirements to pay annual fees.
Suleman said licence fees were a core obligation of any business operation, as such, not negotiable.
At least 15 radio and television stations risk closure due to outstanding licence fees.