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Police in bid to block currency fraudsters

By | September 23rd 2010 at 12:00:00 GMT +0300


Police have asked mobile phone banking agencies to install ultra-violet (UV) light currency validation machines at their outlets for verification of currencies deposited with them.

They want all M-pesa, Zap and yu cash dealers to easily detect fraudsters, who are on the loose, with fake currency.

“Fraudsters have been visiting the agents and making deposits using fake currencies at an increasing rate. The installation of the machines will increase detection rate of counterfeit currencies,” reads part of a police report on fraud.

The report also revealed that fraudsters have targeted unmanned ATM lobbies to perpetrate card fraud.

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‘‘This is because the fraudsters know some of the lobbies are not installed with CCTV cameras to capture their images.’’

Consequently, the Banking Fraud Investigations Unit wants Central Bank and Kenya Bankers Association to ensure all banks put in place sufficient control systems at the lobbies to tame the crime.

The revelation comes days after two suspects were arrested at a Pesapoint lobby in the city with 17 ATM cards and Sh100,000 they had withdrawn.

The police report disclosed how staff at a local bank colluded with two of its customers, whose ATM cards they used, to steal Sh31 million in four days from the institution.

Police say higher use of credit cards has exposed the sector to fraudulent activities like cloning of cards and forged authorisation.

“Banks should improve on the security features of the cards to tame theft of the card information by fraudsters because the vice can cripple the sector,” says the confidential report.

staggering amount

The report covered between January and June, this year, in which fraudsters raked a staggering Sh761 million from various commercial banks.

Last month banks lost Sh297 million through fraud.

The report says some judicial officers lacked the capacity to conclusively deal with complex fraud cases.

The report recommends that CBK and KBA organise training sessions to train the officials on fraud related matters for effective management of cases.

It also calls on the stakeholders to push for an independent cyber crime legislation to cover crimes committed through the computer systems.

“The department further noted that cases of staffs being involved in frauds either through collusion with fraudsters or internally were on the increase during the period under review,” reads part of the report.

Out of the 16 types of fraud that were classified, transfers which include the Real Time Gross Settlement Systems was the leading conduit through which Sh269.7 million was lost.

The report questions if the detection systems in banks are effective in preventing the frauds and whether the recruitment methods have a direct link with the rate of fraud.



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