In November 2022, the police station in Malawi’s capital, Lilongwe, recorded at least two complaints about fraudsters who had transferred more than 3 million Malawian kwacha (approximately $2,920 at the time of writing) from accounts accounts of two victims, after registering new SIM cards against their phone numbers. Investigations into the complaints led detectives to the town of Zomba, where police arrested four suspects, including a Telekom Networks Malawi (TNM) employee and a mobile money dealer for TNM Mpamba and Airtel.
“After being interrogated, they all admitted [being] those responsible for the theft [the] above reported cases and many more through SIM card swapping fraud,” the police report seen by Rest of the world said. “Currently, investigations are still ongoing to recover the stolen money and arrest other suspects in the same system.”
Such crimes have become common in Malawi, as fraudsters exploit the weak digital security systems in the southeast African country. Fraudsters steal 120 million kwacha (nearly $117,000) every month through mobile money transfers, according to the Malawi Communications Regulatory Authority (MACRA).
With 10.1 million, Malawi has more owners of mobile money wallets than bank accounts, which the country has at 1.2 million, according to the latest official data. These wallets make it easier for fraudsters to target unsuspecting users through spoofing, fake text messages, and identity theft. The increase in digital currency fraud parallels the Government of Malawi’s increased efforts to promote financial inclusion by digitizing the economy.
“It’s still a big deal,” said Peter Kalaya, spokesman for the Malawi Police Service (MPS). Rest of the world. Kalaya did not disclose how many such cases occur each year. “Each month, our police stations register different cases of this nature. The scammers take advantage of the low level of literacy of the subscribers and continue to steal huge sums of money; and each time they become innovative.
While many scams happen remotely, some scammers target victims in person. Tapiwa Mussa joined Malawi’s growing mobile money business in 2021 as a merchant, where she helped customers send and receive money through platforms run by telecom service providers like Airtel and TNM. Four months ago, a customer came to her store to withdraw about 270,000 kwacha (about $265), most of the money she had that day. Musa said Rest of the world that after the transaction, the customer showed him a confirmation message and left with the money. “Although I did not receive the message on my phone, I gave him the money with the belief that the message on my phone was suspended [sic] because of network issues,” she said. “Later, I realized that no amount was credited to my account, and that’s how I lost my capital.”
“Malawi has more owners of mobile money wallets than bank accounts at 10.1 million, which the country has at 1.2 million.”
Cases like Mussa’s could potentially hamper the use of digital platforms and threaten Malawi’s digital economy as people become more skeptical, said Daud Suleman, Managing Director of MACRA. Rest of the world. “The longer people stay away from digital payment systems, the more difficult it will be for us to reach a phase of the digital economy where payment for a large number of goods and services should pass.”
John Kapito, executive director of the Consumers Association of Malawi (CAMA), attributes the increase in such cases of fraud to shortcomings in the existing legislation. “The main challenge we have in Malawi in terms of online money transactions is that we have weaker laws,” Kapito said. Rest of the world. “Enforcement of the rules that can guide the appropriate use of money online is weak. Currently, the responsibility lies with the customer, and it becomes a challenge for ordinary consumers to go through the process of following up and holding something. ‘a manager. “
The increase in fraud has prompted MACRA to implement new measures, such as the introduction of compulsory registration of mobile phones and the creation of a digital forensic laboratory with the MPS.
“We are in advanced stages of the procurement processes for the central registry for identifying equipment used to register mobile phones, and we should have the equipment operational very soon,” MACRA’s Suleman told a conference. Press. “The Digital Forensics Lab is also taking shape.” He added that the regulator was also considering another round of mandatory SIM card registrations to “eliminate illegal and duplicate registrations that used a single national ID to register multiple SIM cards.” He said this would limit opportunities for fraudsters and help mobile money users feel more secure.
Spokespersons for the MPS and mobile network operators said Rest of the world that they step up their efforts to combat mobile money fraud.
“As a law enforcement agency, we are determined and ready to deal decisively with these crimes,” said MPS’s Kalaya. “We are educating the public through different forums so that they know what constitutes these cases and how to report them to us. We investigate, make arrests and prosecute offenders.
Norah Chavula Chirwa, head of brand communications for Airtel Malawi, one of the country’s largest telecommunications service providers, said the company is fighting fraud through radio programs and text messages alerting customers and informing fraudsters. “We continue to work with the police and the banks on investigations and guiding customers on what to do in the event of a scam, ie report to the police,” Chirwa said. “We continue to remind customers not to share their PINs for their Airtel Money wallets, and we also remind them that once they receive a transaction message, they should verify that it is from Airtel. ” TNM Marketing Director Tione Kafumbu Told Rest of the world that the company blocks the numbers involved in the fraud and advises customers to use unpredictable security pins. “We have strengthened our SIM swapping guidelines,” Kafumbu said. “Currently, when swapping a SIM card, the owner has to be present with ID, and we take their picture to prevent some scammers from swapping people’s numbers and stealing them.”