In Malawi, mobile money users get scammed of about $117K monthly

About 10.1 million people own mobile money (MoMo) wallets in Malawi, according to the Reserve Bank of Malawi. This implies that MoMo accounts are 841.7% higher than bank accounts in the country which stands at 1.2 million.

Unfortunately, this population of MoMo users have continued to be victims of fraud. Malawi Communications Regulatory Authority (MACRA) states that cybercriminals steal about $117,000 through mobile money transfers every month. "Mobile money, in our case, has become the fuel that is driving our digital economy because the uptake has within a short period surpassed what banking has achieved. But at the same time, Malawi is losing huge sums of money a month to mobile money fraud," Daud Suleman, MACRA director general, said.

Although the country introduced the Electronic Transaction and Cyber Security Act [pdf] in 2017 to make provision for criminalising cyber offences; and provide for investigation, collection and use of electronic evidence; and for matters connected therewith and incidental thereto, cybercrime is on the increase.

"Every month, our police stations record different cases of this nature. Scammers take advantage of low literacy levels among subscribers, and they continue stealing huge sums of money; and each time, they are becoming innovative," Peter Kalaya, a spokesperson for the Malawi Police Service (MPS), told Rest of World.

"Through our system, we are able to track down people involved in fraudulent activities but still we need the government to play its role in helping to arrest people aiding prisoners," Telekom Networks Malawi (TNM) CEO, Arnold Mbana, told ITWeb in 2021. "Thousands of our customers are being victimised, but we are implementing various strategies to curb this situation including carrying out awareness campaigns and blocking SIM cards and handsets that are used for fraudulent activities."

Mbana said that these cybercriminals use identity theft, fake promotional SIM swap services, SMS fraud as well as impersonation by calling random numbers and informing people they have property at the border that requires a fee for clearance.

Combating MOMO fraud in Malawi

In previous years, the Malawian government has used mandatory SIM card registration exercises. In December 2020, a court in Malawi convicted and sentenced a prison warder to two years in jail for supplying SIM cards to prisoners who used the cards to steal money from mobile money users.

MACRA's Suleman says that the Malawian authorities intend to "flush out illegal and duplicated registrations that used a single national ID to register multiple SIM cards," via another SIM registration exercise.

"We are at an advanced stage in procurement processes for the Central Equipment Identification Register used for registering cellphones, and we should have the equipment operational very soon," he added.

On the law enforcement and security agencies' side, Kalaya said that "the MPSe are committed and geared to decisively deal with these crimes. We are sensitizing the public through different forums for them to be aware of what constitutes these cases and how to report such cases to us. We are investigating, making arrests, and prosecuting offenders".