Colleges lose millions in fake bank pay-in slip scandal

Moi University is one of the institutions that have been affected by the fake bank slips scam. Photo/FILE

Students could be losing millions of shillings through fraudulently obtained bank pay-in slips.

Fraudsters are on the loose in Eldoret Town, where they mostly target students in universities and middle-level colleges.

Unlike their primary and secondary school counterparts, whose parents deposit the fees in the institutions’ accounts, college students are often given cash to make the payments.

Investigations conducted by the Daily Nation showed that the con artists operate in crowded banking halls, where they pose as students who have already paid the fees and offer to help their “counterparts” to jump the queues.

Others pose as bank employees. To sweeten the deal, some students are offered discounts of about Sh5,000 for every Sh20,000 they pay.

Those who fall prey to these schemes are given pay-in slips which are rejected by colleges when the money does not reflect in the accounts later.

Accomplices

The counterfeit slip does not give details of the time of the transaction and the teller number indicated is not available at the banks. This makes it difficult to hold any bank cashier responsible.

“They have accomplices who pretend to have accepted the deal and display receipts they have allegedly been given by colleges after presenting the fake pay-in slips,” said an Eldoret Polytechnic student who lost Sh25,000.

The student, who declined to be named, citing embarrassment, said he was told that for every Sh20,000, he would be given an additional Sh5,000. He shared the message with some of his friends, who rushed for the “good deal”.

“Sadly, it emerged that my money was long gone when it was eventually discovered that the pay-in-slip was fake,” said the student, displaying an invoice indicating that he still owed the college the amount he thought he had paid.

The student, who has since been evicted from the institution’s hostels, said polytechnic authorities discovered that the money in their account did not match the receipts they had issued for fees paid in.

Among the higher learning institutions in the region are Moi University, Eldoret Polytechnic, Kenya Medical Training College, Rift Valley Technical Training Institute, Mosoriot Teachers Training College and Kenya Institute of Management.

The fraudsters are said to have been operating in Eldoret since 2008. Most institutions have now put in place mechanisms to thwart them after losing millions of shillings.

Students found to have submitted the fake pay-in-slips had their school fees accounts reversed. Moi University’s chief academic officer, Prof J. K. ole Karei, said the fraud cases ended when the university reviewed its policy for paying fees.

“It was agreed that students would only be issued with university receipts to acknowledge payment of fees after we received a bank statement indicating the fees they paid was deposited in the university account,” Prof ole Karei said.

However, he could not disclose how much the institution had lost before they moved to seal the loophole. Colleges that admit few students have not been affected much as their internal audit mechanisms are able to detect any counterfeit transactions fast.

“We verify the bank statements that the students give us before declaring any financial transaction valid,” said African Institute of Research and Development Studies’ accountant Valentine Morogo.

Traumatised

Mr Josephat Kipkemboi Eldoret Polytechnic’s dean of students, said most of the affected students were traumatised and his office was counselling them. The institution is said to have lost over Sh10 million in the scam that was exposed last month.

National Bank’s corporate affairs manager Rebecca Gikuru exonerated the bank from blame, saying the only person authorised to receive money from a customer at the bank is a cashier, who must issue a receipt for the transaction.

Most learning institutions that have raised concerns have been served with an active online banking system, which can detect such anomalies.