Even Mobile Money Isn’t Immune to Fraudsters
A number of recent reports have shared some issues with mobile money fraud. When it comes to the internet and money, fraud is nothing new, and it was really only a matter of time before mobile money transactions would fall victim to fraudsters of one sort or another.
The article Fraudsters Exploit Mobile Money Loopholes in the Uganda-based Observer shares some of the common frauds facing mobile money users. Lately there has been a rash of frauds committed by phony agents and customers, where transactions are incomplete, token information is exploited or fake transactions are used to secure funds.
In an emerging market, where new mobile money providers are continually popping up, there is a strong element of education that is required for both consumers and agents. In many ways, mobile money is like the Wild West as the services and technology have seriously outpaced the level of user education or government regulation. In this Wild West of mobile money transactions, both consumers and agents need to do their homework and ensure that they are working with reputable and proven providers. Providers that are well-established will use secure and reliable technology and help users understand how to best use mobile money securely and avoid scams.
For consumers, there’s a strong element of education needed. Service providers need to step up and ensure consumer fully understand the process and don’t fall victim to scams. Just like we experienced with credit/debit transactions when shopping online and in person in North America, there’s a definite element where consumers are their own worst enemy, and simply are not aware of the risks.
Agents are also falling victim to scams. Check out the story (also from Uganda) of Francis Mugisha who was recently arrested for scamming mobile money agents. Again, agents need education on how to spot scams and deal with them. If you’ve ever worked in an environment that takes credit cards, you quickly learned that a code 74 was a possible fraudulent card and you should not return it to the customer. Mobile money needs to catch up to this type of thinking.
It certainly will be interesting to see how the marketcontinues to develop and how providers and governments rise to the challenge of managing the newest, creative scams and help protect consumers.