Where does dead subscribers’ cash go?

By Paul Wafula

KENYA: Phone service companies are holding onto a growing mountain of money in airtime and cash transfer deposits in the names of dead subscribers.

The unknown amounts have been sitting unclaimed, some for five years, with little or no effort by mobile phone service operators to find their owners.

Safaricom alone switched off about 1.2 million inactive and unregistered lines in an industry-wide deactivation exercise that ended this month. Many of these are likely to be lines that were issued to people who have since died, but there is no way to determine that. 

Ignorance

Unlike other unclaimed assets in the financial markets, mobile deposits have not received much attention. Most consumers interviewed remain largely ignorant on how to claim monies sitting in their relatives’ accounts in case they pass on.

Mobile operators reckon that the amounts left are usually ‘insignificant’ and say they are waiting on the new Unclaimed Assets Authority to give direction on what they should do about the deposits.

The fact that most operators do not require a user to appoint a beneficiary while signing up new for subscription further compounds the problem of tracing the next of kin.

This has seen an undisclosed amounts of money continue piling up in mobile money accounts after the owners die.  

“If a claim is made on behalf of a deceased person, we examine the issue, and insist the claimant obtain letters of administration,” Airtel’s Director of Corporate Communications Dick Omondi said in an email interview. Airtel, which has a 10 per cent market share, does not have data on how much of the money in its mobile money system falls under this category.

But the firm says once the next of kin shows up, it is put into a suspense account.

Safaricom, which controls more than two thirds of the market by subscriber base, has not disclosed how much dead people’s money is held on its books.

The firm could not provide any data on the numbers of people who have ever claimed money sitting in the accounts of deceased subscribers since 2007 when they launched their service.

 “We are not allowed to divulge these amounts except to the Unclaimed Financial Assets Authority,” said Mr Nzioka Waita, Safaricom’s director of corporate affairs.

Providers’ take

“However, the volume or values are not significant.”

We sought comment from Telkom Kenya for three days. By the time of going to press, the firm was yet to provide its perspective on this story.

Any amounts held in the recently deactivated lines are likely to eventually go to the Unclaimed Assets Authority, even if relatives of the deceased person are alive since many do not know the money exists in the first place.

Safaricom maintains that unless a legal representative of a deceased person shows up, then its hands are tied.   “Safaricom follows the requirements of the law of succession on matters that touch on death of an M-Pesa subscriber. For us to take action, the representatives of the deceased customer must attach the deceased’s death certificate and the relevant letters of administration or testamentary documents,” Waita said.

Airtel officials say the same process applies before they take any action.

“In many instances, it’s the next of kin who contact us about the account. The account is deactivated from any transactional activity, until claim is settled. Amounts in dispute are held in a suspense account,” Mr Omondi said. “If after two years if it remains unclaimed, we will send the amount to the body established recently to handle unclaimed financial assets.”

Requirement for claims

However, Waita says: “An inactive line is not an indication of death per se; it may be caused by any number of reasons, not merely the demise of a customer hence our insistence on having legal documentation.”

To get the money, one will also need to provide relevant documents to support their case. It is also difficult for beneficiaries to tell how much was on the deceased persons account.

“The next of kin is not necessarily the legal representative of a deceased person but a person to be contacted when the customer is unreachable by a service provider for any reason. Safaricom has a duty to ensure that only the legal representatives who have provided the necessary letters of administration or testamentary documents receive the benefits of the deceased’s M-Pesa account,” Waita said.