Mobile Communications

Contador Harrison (Africa) - The 'Fraudulent' Continent

Fraudsters in Africa are having a field day due to a gaping hole in supervision in the telecom and banking sectors that allows fraudsters to pretend to be officials from governments and law enforcement departments. Available data shows that a series of cross-border telecom fraud cases in Africa led to the capture of 907 suspects, and security authorities uncovered over 2,000 cases of telecom fraud in the 29 African countries where the study was carried out.

Sometime back, while in Uganda, I got a call from a man who claimed to be from Airtel Uganda and wanted to know my name and phone details. The caller claimed my line was a winning number in a raffle competition that I had never participated in. He then asked me to send him Airtel airtime worth 10,000 Uganda shillings (about $8), after which he would give me the settings required to access my winning number. At that point, I knew it was fraud, but I decided to send the airtime in order to learn more about their dirty tricks. I sent the crook the scratch card number, assuring him that I had destroyed the airtime scratch card as requested. Minutes later, Mr. Conman phoned from a different line, asking for a further Uganda shillings 100,000. I assured him that even if he wanted Uganda Shillings 5,000,000 I could send it to him. I asked him to call me after three minutes, which he did with utmost exactness. When he called back, I recorded him and told him: "Thank you Mr. Conman. I will go to the grave without forgetting you." Surprisingly, he disconnected the call and efforts to reach him days later, were fruitless.

Uganda Police have, for a long time, been working with telecom operators to help end or reduce the scams. Although law enforcement can trace phone numbers, perpetrators often use unregistered SIM cards, disposable cellular phones, or stolen cellular phone numbers. I now treat all unsolicited phone calls with skepticism, especially when in Africa.

When I sought the views of Mr. Mustafa Mugisa, the President of the Association of Certified Fraud Examiners, Uganda Chapter, he told me that the attitude of top honchos in the telecom and banking sector is wanting. This explains their use of processes and practices that have repeatedly proven ineffective in managing fraud risk. They continue to outsource their hotlines to Kenya and South Africa, oblivious of the fact that 80 per cent of their clients use local languages, and they have failed to invest in improving the capacity of Uganda Police or their own internal capacity, because, as one expert asserted, in one way or the other they benefit from the fraud in their own institutions.

The solution to tackling fraud in African is extending Document Verification Services to the burgeoning private sector as an alternative to their national identification schemes. Private companies and organizations should be able to verify an individual's identity by comparing provided information with registries for birth certificates, passports, visas, drivers' licenses, etc. I think this would help private sector firms develop the ability to verify identity documents, as well as help to tackle fake and duplicate identities which are common in most African countries. Such initiatives should target key sectors like financial services and telecommunications where 90% of fraud cases are reported.

Another alternative could be siloed systems which require specific points of identity for access to bank or mobile services. Government agencies in Africa should also work with those small scale traders, micro enterprises, and companies to look at whether document verification can assist industries with their identity based assessment. To avoid misuse of citizens' information, I think data verification services should not allow access by organizations, private companies, or individuals, but rather it should send encrypted verification requests to the relevant document issuing authority, which returns either a ‘yes' or ‘no' response to verify that person's identity.

By Contador Harrison, Software Director, Somocon Oy



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