Wednesday, 17 July 2013

How Kenyan banks lose millions to criminals



Lawyers say criminals have perfected the art of draining billions of shillings from bank accounts using hi-tech technology and walk away Scott-free.
West Kenya Law Society Chairman Richard Onsongo said majority of the criminals go scot free due to weak laws and wanting investigations that lead to insufficient evidence to prosecute.
“Fraudsters are far ahead of our criminal laws…they are smart, techno savvy and know the gaps in law that come handy once they are arrested,” Onsongo said.
According to data from the Banking Fraud Investigations Department (BFID), fraudsters have stolen at least Sh1.5 billion from Kenyan banks in the past one year in schemes hatched by technology-savvy bank employees.
Data from the BFID shows financial institutions reported Sh1.49 billion stolen from customers’ accounts between April 2012 and April this year.
However, investigators managed to recover a mere Sh530 million with several cases are pending in court or still under investigation.
The data indicates that between November 2012 and April this year alone, a total of Sh952 million was stolen. Of this, only Sh345 million was recovered.
Onsongo said financial crimes are currently thriving leading to commercial banks losing millions of shillings without a trace.
“Credit card ‘cloning’ is among emerging forms of identity theft banks are grappling with,” he said.
He explained that the fraudsters swipe stolen credit cards through an innocuous black card reader known as a ‘skimmer’.

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