Why Bank Of Ghana Fails To Act On Growing Mobile Money Fraud

Ghana’s enthusiastic efforts of becoming an economy less dependent on cash in the West African sub-region will be a mirage if the Bank of Ghana (BoG), mobile money transfer operators and other stakeholders fail to act on growing mobile money fraud.

Criminals have invaded the country’s leading mobile money transfer platforms making it possible for some people to doubt the genuineness of the platforms which help to boost financial inclusion in the West African second largest economy after Nigeria.

According to Ghana Chamber of Telecommunications, mobile money operators in Ghana namely, MTN Mobile Money, TigoCash, Airtel Money and Vodafone Cash have recorded 388 money fraud cases in 2016 as against 278 in 2015.

Although the mobile money operators did not reveal the amount of money made away by the fraudsters, majority of these cases have been reported to the police for further investigations and closure. While some fraudsters involved in the some cases have been prosecuted.

To this end, telecom industry analysts warned that mobile money fraud which is rampant in Kenya, Uganda and Tanzania, is also rising in Ghana and it is here to stay because of the identifiable loopholes in the national identification system, greed and ignorance, among others.

Identifiable loopholes
Experts noted that not all the national ID cards permissible for the registration of mobile money account(s) are genuine. Because of this it is difficult to trace mobile money fraudsters and other criminals in the country.

In Ghana, the national ID cards which are permitted to be used for the registration of mobile money account(s) and SIM cards are a valid Passport, driver’s license issued by the Driver and Vehicle Licensing Authority (DVLA), National Health Insurance Scheme (NHIS) card, Voter ID and National ID cards.

But some criminals do cheat these agencies mandated to issue these national ID cards. So some of the ID cards used in the mobile money account registrations could be faked, according to cyber security experts.

Mobile money operators blamed the geometric rise of mobile money fraud in the country on customers’ greed and ignorance.

Some customers’ attempt to get more money to solve their pressing demands end up being cheated by fraudsters.

The Head of Research & Communications at the Ghana Chamber of Telecommunications, Derek Laryea noted that some customers are not aware of the existence of mobile money fraud in the country because of limited information and publicity.

A Manager, Mobile Finance Services Analytics, Budget & Reporting at MTN Mobile Money, Solomon Hayford, added that inadequate customer vigilance and compromises, are among the contributory factors to the uptake of mobile money fraud in the country.

But the mobile money regulator, Bank of Ghana (BoG) identified the overwhelming growth in mobile money wallets/accounts, over the last two years, as the main attraction for fraudsters.

The Director of Payment Systems at the BoG, Dr. Setor Amediku recently noted that as of today, there are over 22 million mobile money accounts as against 11.6 million regular bank accounts.

He noted that whereas the huge growth in mobile money wallets has boosted the country’s drive towards greater financial inclusion, wallet holders have not been able to keep up with the technology so they have also become vulnerable to more sophisticated fraudsters.

Dr. Amediku was speaking at a Mobile Money Fraud Forum as part of the just-ended Cybersecurity Week held in Accra.

Types of mobile money fraud
Anonymous calls from fraudsters: Customers receive calls from fraudsters after deposits to transfer funds received with the claim being airtime.

False Promotion: Customers are lured to authorize cash out transaction with the claim of winning Mobile Money promotion.

Cash out Fraud: Customers are pushed payment approval prompt and lured to enter their pin code in order to receive price won through Mobile Money.

False Promotion: Customers are lured to visit merchant point to redeem price won through Mobile Money.

Scam: Fraudsters calling to dupe customers under the pretext of delivering goods from abroad. Some fraudsters call and ask for specified amounts to be deposited into a mobile money account, in exchange for goods from relatives/friends from abroad.

False Cash out SMS: Fraudsters send false cash out messages to merchants for authorization of which the physical cash is issued by the merchant to the fraudster without the equivalent e-cash.

False Promotion SMS: Fraudulent consumers send fake SMS to agents either from their own handsets or generated from computers. The SMS looks genuine to the recipient.

Addressing mobile money fraud
“Mobile money operators are beginning to intensify mobile money fraud education” to enable them reduce or end the canker in the country, he said.

Although, telcos especially MTN Ghana are doing their best to fight the mobile money fraud in the country, the BoG which is the mobile money regulator, is appeared not to be doing anything to help the mobile money operators to fight the menace.

The BoG is yet to crack the whip despite the failure of the above-mentioned measures instituted by the operators to end or reduce the mobile money fraud in the country.

Per the new E-money Issuer (EMI) guidelines introduced in 2015 by the BoG to govern the mobile money sector, it is mandated to sanction mobile money operators when there are breaches on the parts of the operators. Surprisingly, in the face of the growing mobile money fraud in the country, the BoG is still playing the ostrich.

Mobile money in numbers
Despite the fact that banking started in Ghana about a century ago, only about 40 percent of Ghanaians have bank accounts, meaning majority of the population are unbanked. This unbanked population therefore use cash for transactions, excluding them from the formal financial system, i.e. access to savings, bank credit, mortgages, investment and other financial products.

But in the last five years, mobile money has seen an astronomical growth, drawing thousands of the unbanked households into the financial inclusion net.

According to the BoG data, as at 2012, the total value of mobile money transactions totaled GHS594.12 million. Significantly, as at December last year the value of transactions had reached GHS78.5 billion, indicating that within five years, mobile money transactions has grown by more than 13,000 percent. This is huge and promises a better future.

Regarding employment by mobile money firms, as at end of last year, the cumulative registered mobile money agents in the country was 136, 769. Of this number, 107, 415 are active mobile money agents.