Kenya: Banks Say Stolen Money in Offshore Accounts Out of Their Reach
BANKS are unable to directly recover the huge sums of money stolen from their customers via online transactions if the cash is stashed in offshore accounts, its association said yesterday.
The Kenya Bankers Association chief executive officer Habil Olaka said most countries like Mauritius or Switzerland where fraudsters hide the money are non cooperative with the investigating agencies hence making recovery efforts difficult.
“Furthermore the negotiations are at the state level hence banks have no say. It would be misleading to say that banks would be able to recover stolen money in offshore accounts,” he said yesterday at the launch of the card and online safety campaign in Nairobi.
The Central Bank of Kenya’s Banking Fraud Investigations Department report shows commercial banks lost $9.4 million (Sh896.94 million) to fraudsters in the first half of 2014.
The cash was lost through electronic funds transfer, identity theft, online fraud, cheques and credit card fraud and forgery of documents.
The report shows investigators only managed to recover $6.94 million (Sh662.21 million).
Olaka said the introduction of the chip and pin ATM cards has eliminated cases of fraudulent transactions in banking adding that no card skimming incidence has been reported in the last one year since mots banks migrated to the EMV (Europay, Mastercard, Visa) compliant cards.
“Nearly a year after the introduction of chip and pin technology as the industry wide standard for payment cards, no card skimming incidences have been reported,” he said.
KBA director of technical services Fidelis Muia said more than 13.9 million EMV compliant payment cards were in use by February adding that the eradication of card skimming fraud has created a market opportunity to promote card usage.
“We anticipate the enhanced security features will spur customer confidence resulting in more usage at ATM points, retail points and online platforms,” he said.