Equity Bank, Kenya’s biggest bank, was the target of a debit card fraud in which the perpetrators stole $2.1 million. According to a letter sent to the Directorate of Criminal Investigation, the stolen funds were moved to over 500 bank and mobile money accounts. The bank has restricted all accounts that received those funds.
A fraud detective at the DCI confirmed the incident to TechCabal and claimed 19 persons were arrested in connection with the fraud.
Equity Bank declined to comment.
Three sources with knowledge of the investigation said the perpetrators executed a “card-not-present” scam to steal money from victims. While this type of fraud typically involves using stolen card details to shop online, fraudsters often create websites and route payments to those websites to access funds in those cards. Those funds are then moved to other bank accounts.
“Preliminary investigations revealed that between 09/04/2024 and 15/04/2024, KES 179.6 million ($1.3 million) was paid out from the GL fraudulently to the 551 Equity Bank accounts,” a letter signed by Gerald Munyiri, Equity’s general manager security said.
“KES 63 million ($478,360) was sent to Safaricom and KES 39 million ($296,015) to eleven commercial banks. We are in touch with Safaricom and the respective banks to assist in tracing the movement and safeguarding the funds,” part of the same letter said.
One theory is that the transactions were done in batches because Kenyan banks require customers to disclose information for all transactions over $10,000. Mobile wallets also have a limit of $1,900 per transaction, with a maximum of $3,800 daily.
Fraud is a growing concern in Kenya’s financial services sector. According to TransUnion Africa, a credit reporting agency, Kenyan banks lose about $130 million to cybercriminals yearly, mostly through loan stacking and identity theft.
Kenya’s Financial Reporting Centre (FRC), an agency that tracks the flow of money in financial institutions– flagged more than $600 million linked to card fraud, corruption and terrorism financing in the three years to July 2023.
Most banking fraud cases in Kenya go unreported, as most financial institutions choose to resolve them quietly, albeit with the knowledge of the Central Bank of Kenya (CBK), the sector regulator.
In March 2024, Habil Olaka, the outgoing chief executive of the Kenya Bankers Association (KBA)told Business Daily that local banks are increasing spending on technology to help fight growing fraud.
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