Safaricom urges courts to slap heavy fines on fraudsters
Safaricom chief executive Bob Collymore. He said most of the reported fraud cases are conducted by employees because they understand the systems better. FILE | PHOTO
What you need to know:
- A recent report by audit firm Deloitte Kenya shows that most of the money is lost through cash theft, cheque fraud and misappropriation of assets.
- A survey by PricewaterhouseCoopers says that out of the reported fraud cases globally, 70 per cent indicated the impact was in the region of about $100,000 (about Sh9 million) or less.
- Kenya Commercial Bank CEO Joshua Oigara told Nation that close to 40 per cent of fraud cases in the bank last year, when it was defrauded about Sh300 million, were perpetrated by its employees, while another substantial portion involved collusion with external dealers.
Telecommunications firm, Safaricom, wants the Judiciary to act tough on fraud cases, which cost local companies about Sh1 billion annually.
The telco, which fired at least 56 staff last year over fraud, said the crime is a big concern. This, the company said, is because of the huge amount of money it transacts through its mobile money platform M-Pesa and the sensitive personal data it hosts.
“I’m afraid the number (of fraud cases) could be bigger this year. We have also had cases of staffers in customer service soliciting money from customers, which is fraudulent,” Safaricom CEO Bob Collymore said.
It is expected that tougher penalties and expeditious handling of fraud cases would deter perpetrators of fraud, an economic crime that analysts attribute largely to insider jobs.
A recent report by audit firm Deloitte Kenya shows that most of the money is lost through cash theft, cheque fraud and misappropriation of assets.
Banks are the worst hit since they handle huge sums of money. The second biggest victim is the insurance industry.
Many companies say cases of employee fraud take too long to be heard and concluded.
DELIVERING JUSTICE
“The biggest challenge in fighting fraud is the court system. A lot of perpetrators are still walking free. Court cases go on for years and corruption has made it easy for offenders to ‘buy’ justice,” Mr Collymore said.
“If we are to win the fight against fraud, we need companies to be open about it and the courts to get serious in delivering justice.”
According to Deloitte, corporate bank accounts are vulnerable because they frequently move a lot of money, making the tracking of any suspicious deals difficult compared to monitoring personal accounts.
A survey by PricewaterhouseCoopers says that out of the reported fraud cases globally, 70 per cent indicated the impact was in the region of about $100,000 (about Sh9 million) or less.
Mr Collymore said most of the reported fraud cases are conducted by employees because they understand the systems better.
“A lot of it, especially the incidents involving huge amounts of cash, is insider jobs where employees of Safaricom collude with bank employees and move money from one account to another. We have had a few of such cases and handed over the perpetrators to the police,” he said.
Kenya Commercial Bank CEO Joshua Oigara told Nation that close to 40 per cent of fraud cases in the bank last year, when it was defrauded about Sh300 million, were perpetrated by its employees, while another substantial portion involved collusion with external dealers.
Mr Oigara called on the justice system to be more assertive when sentencing fraudsters to curb the crime. He said companies should be more open about fraud as a way of dealing with it.
“Fraud is certainly not a new thing and the statistics you see only show that corporates are now much more willing to talk about them,” he said.
