Staff of telcos accomplices in mobile money fraud – Police

The rate at which subscribers of mobile money are being defrauded by both criminals and some staff of telecom companies has reached alarming proportions.

The service, which has been touted as the innovation to bring banking to the doorsteps of the unbanked, is turning out to be a monster depriving mostly poor people of their little money.

What is even worrying is that, it is very difficult for security agencies to track down the perpetrators due to the use of fake identities.

The Director in charge of the Cyber Crime Unit of the Ghana Police Service, Chief Superintendent Dr. Herbert Gustave Yankson, told The Finder that, as a result of fake identifies, the unit is able to investigate and prosecute only 10% of cases reported, due primarily to the use of fake identities to register SIM cards.

Mobile money, a time-bomb.

He described mobile money as a time-bomb waiting to explode, unless something drastic is done to curb the increasing fraud in the system.

50% of Subscribers experienced fraud or have been a target.

It is estimated that, at least five out of 10 mobile money subscribers have either experienced one form of fraud or have been a target for mobile money fraudsters/scammers.

How subscribers are targeted

Subscribers are mainly targeted through Short Message Service (SMS), phone calls, e-mails and social media platforms, among others.

Confidence in mobile money waning

The increase in reported fraud cases involving some unscrupulous persons and confidence tricksters of mobile money services, is eroding confidence in the system.

Telcos staff involved

What is even disturbing is that, fraudsters arrested by the Cyber Crime Unit included staff of mobile telecommunication companies, who illegally infiltrate the database of telecom companies they work for, and use the information to commit mobile money fraud.

Telcos staff infiltrate database

The Finder learnt that, these employees, without authorization, access the database of mobile money merchants and change the registration details of customers in order to withdraw money from their accounts.

Telcos staff change pin number of customers in the database.

These staff of telecom companies who are in league with criminals then reset the number with the money to a new owner in the database, which gives the new owner access to change the PIN and withdraw monies.

Telcos staff withdraw monies from customers’ accounts.

They then acquire new SIM cards and use the pins to withdraw monies from merchants.

Other modus operandi of the fraudsters.

Initially, the fraudsters could send a text or call and tell subscribers that they have won some lottery so they should send them money to claim their prize.

The moment subscribers send the money, the fraudsters withdraw it and get rid of their SIM so that subscribers can never reach them again.

Their recent strategy is to call subscribers and tell them that there is a problem with account and offer to help resolve the problem.

For instance, victims are told that an amount they received in their account has been wrongly transferred as airtime, and the criminals offer to assist subscribers to convert it back to cash.

The fraudsters then ask subscribers to get another phone so they can take the subscriber through the process, and if the subscribers are not conversant with the system (like most users who do not understand English properly and hence cannot figure out what they may be doing), the criminals make subscribers to generate a code for an ATM withdrawal or get subscribers to send money to their phones, and they bolt with it.

Other criminals also call and tell their victims they have wrongly sent money to their account so they beg the subscribers in the name of all the deities to send it back to them, and once the subscribers do that, the criminals withdraw immediately and get rid of their SIMs.

As the newest fraud technique emerging, some subscribers, without having performed any transaction, receive text messages of withdrawal of money from their accounts.

Money laundering.

Dr Yankson sees mobile money as fertile ground for money laundering considering the volume of money circulating through mobile money.

Is BoG monitoring money laundering through mobile money?

Till date, the Bank of Ghana (BoG) has not made any pronouncement on monitoring of mobile money for money laundering transactions.

Sale of pre-registered SIM cards

Chief Superintendent Dr Yankson explained that agents of telecom companies are selling pre-registered SIM cards in contravention of the law.

Use of fake identities for SIM cards registration

In addition, he said the fraudsters also use fake identities to register SIM cards, and this is possible because the telecom companies are not doing real-time and post-registration verification of identities presented by subscribers.

He stated that the telecom companies always use the lack of a national database as excuse for not doing real-time verification.

Telcos say private solutions expensive.

Even though there exists solutions developed by private companies, he said, the telecoms say they cannot afford.

Proceeds of crime hidden on mobile money.

Chief Superintendent Dr Yankson disclosed that use of fake identities has made it easy for criminals to also use mobile money to receive and hide proceeds of crime.

He noted that when the right identity is used in registration, it makes fighting crime such as mobile money fraud easy and less expensive.

Chief Superintendent Dr Yankson advised mobile money subscribers to change their Personal Identification Numbers (PIN) at least once every month, not to save their PIN Codes in their mobile devices, password protect their phones, and not share or give their PIN out to third parties.

Law on SIM card registration.

Parliament in 2012 adopted the Subscriber Identity Module Registration Regulations, 2011 (L.I. 2006) to give backing to SIM card registration in the country.

Failed SIM card registration.

Telecom companies were made to register all SIM cards, but at the end of the exercise, it was discovered that the registration was full of fake identities and other challenges.

SIM card registration to be done again.

Consequently, the government at the time decided that the registration should be repeated when the National Identification Authority builds the national database of all Ghanaians.