For many years, attaining financial inclusion for all, especially persons within the informal sector of the Ghanaian economy was increasingly challenging.

Persistent instability in the small-scale financial sector, leading to intermittent insolvency of some Banks, Micro-credit institutions, and Savings and Loan Companies made it unattractive for many people to embrace banking services.

The introduction of mobile telecommunications into the country in the 1990s, and subsequently, the adoption of mobile money services in July 2009 changed the dynamics of the banking industry.

It brought financial services closer to the public through existing mobile wallets serving as pseudo-bank accounts.

Mobile money is a type of electronic payment or money transfer service that is based on account wallets held by a mobile telecommunication operator and accessible from subscribers’ mobile phones.

It offers simple person-to-person transactions rather than complex banking transactions and provides an easy, fast, secure and cost-effective way of making payments.

A report by market research firm, Imarc Group, on Ghana’s Mobile Money Market, estimates that the market size reached US$121.8 billion in 2022, and it is expected to reach US$590.7 billion by 2028.

It is estimated that about 56.7 million mobile money wallets have been created in Ghana as at the end of 2022 with 20.5 million of them being very active.

The simplicity of transactions, low cost, and widespread accessibility have made the use of mobile money very friendly even to the uneducated folks in the countryside.

However, the enormous gains derived from mobile money are threatened by the activities of mobile money fraudsters. For instance, the Bank of Ghana reported that a total of 12,166 cases of mobile money fraud was recorded in 2022.

This article seeks to shed more light on the nefarious activities of mobile money fraudsters and suggest some measures to combat them.

Types of Mobile Money Fraud
Fraud in Mobile Financial Services defines mobile money fraud as “the intentional and deliberate action undertaken by players in the mobile financial services ecosystem, aimed at deriving gain (in cash or e-money), and/or denying other players revenue and/or damaging the reputation of the other stakeholders”. Thus, essentially, mobile money fraud is largely perpetuated by players within the mobile money value chain.

Mobile money fraud comes in different forms. However, one can easily group them under the following, based on a study of the Bank of Ghana Annual Fraud Report:

Fake Promotions
Mobile money fraudsters sometimes create enticing promotions, such as fake lotteries, giveaways, or discounted offers, designed to attract potential victims. These promotions are often sent via SMS messages, WhatsApp chats, or via phone calls.

In many instances, the fraudster pretends to be a worker of the mobile operator who has called to help the victim redeem a supposed prize.

The fraudster then begins to ask the victim some series of questions as a means of authenticating the supposed winner’s identity and then instructs the victim to follow some basic steps by dialing some shortcodes via an unstructured supplementary service data (USSD) string.

As the victim obliges and follows the fraudster’s prompts, a debit message is pushed to the mobile phone of the victim to enter his mobile pin code to redeem the prize. Once the victim completes the entry, the electronic wallet may become compromised and be scammed of funds.

Wrong Transfers
This involves fake SMS requesting a reversal of funds transfer. Thus, the fraudster adopts the posture of seeking to reverse a supposed erroneous transaction.

The Fraudster informs the victim of a wrong deposit and offers to assist in reversing the transaction. Most people fall victim to this scam as they allow the fraudster’s prompt to withdraw money from their wallets.

SIM Card Swaps
SIM card swaps are perhaps one of the most sophisticated forms of mobile money fraud. It may lead to a complete takeover of a person’s mobile money wallet, or sometimes bank account if the victim has linked the mobile wallet to his traditional bank account.

In SIM card swapping, a fraudster gains unauthorized access to someone’s mobile phone number by manipulating the mobile operator.

Thus, on many occasions, investigations have proven that SIM card swaps were successful with the help of an insider (someone working with the mobile operator). This is because the infrastructure to swap a SIM is owned and controlled largely by the mobile telecommunication company.

When a fraudster successfully swaps a SIM, he can receive all communications intended for the victim. He could receive transaction notifications intended for his victim, including account balances via SMS of his victim and can leverage that to withdraw funds from the wallet.

Fake Product Delivery
Some fraudsters pose as delivery companies and contact their victims under the guise of delivering goods to them from shops or from relatives abroad.

The fraudsters convince their victims that the sender of the package did not pay the full cost of the delivery and demand payment before they can transport the product.

As soon as the victim makes the payment to a given mobile wallet, the fraudster switches off the phone and runs with the funds.

Fake Servicing Agents
Another emerging mobile money fraud type is the situation where people clone the websites of popular retail outlets, especially those that sell electronic products such as televisions mobile phones and air-conditioners.

When unsuspecting shoppers call the numbers displayed on the cloned website, the fraudsters, who are often abreast with knowledge of the products sold by the original retail outlet convince their victims to make mobile money transfers to a given wallet for the services requested.

Such transfers are often described by the fraudsters as commitment fees, and they insist on receiving some payments prior to delivering the service.

Challenges in combating Mobile Money fraud
Mobile money fraud constitutes one of the most common fraud cases in Ghana today, and arresting the menace seems challenging due to various issues, some of which are discussed below:

Weakness in Regulatory Enforcement
The Bank of Ghana has the primary responsibility of regulating the banking industry while the National Communication Authority is responsible for regulating the Mobile Telecommunications Industry.

Thus, to ensure an effective regulation of the mobile money industry, it is imperative that close collaboration exists between these two state institutions.

Admittedly, the Bank of Ghana issues some guidelines and directives to the actors in the industry and advisory notices to the public.

However, enforcing its regulations is often a challenge, because the Bank of Ghana largely depends on commercial banks and Specialized Deposit-Taking Institutions to achieve its goal.

On the other hand, the National Communication Authority that has direct regulatory responsibility over the Mobile Telecommunication companies may be lacking the personnel with experience in financial market management to effectively monitor and check the mobile operators.

Seeming lack of cooperation from the Mobile Operators
Victims of mobile money fraud have often complained about the seeming lack of cooperation from mobile money operators.

The complainants include individual subscribers, organisations, banks and sometimes Law enforcement officers.

While it is believed that the first three to four hours of any mobile money fraud is usually crucial in tracing the fraudsters, the procedural demands by Telecommunication companies, required for the revelation of the identities of alleged fraudsters, defeats the effort to combat the fraud.

Even when fraudsters are arrested, the funds may have been spent already.

The situation where some mobile operators enable unregistered SIMs to function on their networks also beats efforts aimed at eliminating mobile money fraud..

High Illiteracy Rate
The apparent low literacy levels of victims of mobile money fraud have been another challenge in the fight. Many the victims of the fraud appear to have attained low levels of education.

Greed
Some fraud examiners have observed over the years that greed has often made people become victims of mobile money fraud and fraud generally.

Some people may not be gullible, but driven by their insatiable drive to make quick money, they tend to believe anything that seems to be a potential means for enriching themselves.

Such people often fall for traps such as “fake delivery of goods” and “fake promotions” among others.

Some Measures to Prevent Mobile Money Fraud
There are different measures that may be adopted to help combat mobile money fraud. The measures could be taken by the mobile operators and regulators, and individual subscribers who are often the victims.

Measures by Mobile OperatorsEnhancing KYC for Staff and Subscribers
It is incumbent on mobile operators to ensure high ethical standards among their employees and ensure also, continuous monitoring of these employees to prevent their collusion with fraudsters. Operators may adopt a culture of asset declaration so that wealth creation and acquisition of their staff can be monitored.

Improvement in Technological Systems
Mobile Operators must improve upon their technological systems to ensure greater transaction monitoring.

Anti-fraud electronic monitoring tools should be deployed to help check the pattern of transactions and fully investigate leads of suspicious activities.

Collaborating with key stakeholders
Mobile Operators should instill confidence into their subscribers by collaborating openly and honestly with relevant stakeholders such as law enforcement agencies, banks, and payment service providers to help combat the fraud.

Operators should balance the mandate to enforce subscriber privacy rules against the public interest not shield the identity of perpetrators of mobile money fraud.

Measures by Subscribers
Mobile Subscribers can also take some measures to help safeguard their funds and combat mobile money fraud such as follows:

Protection of Mobile Electronic Devices
Mobile subscribers must protect their mobile electronic devices such as cell phones and tablets from unauthorized access.

Where subscribers save their passwords and mobile money personal identity numbers (PIN) on their electronic devices, access to those devices by fraudsters may lead to the compromise of the security of those wallets.

It is also important to regularly update one’s mobile electronic devices with the latest security patches, operating system, and firmware updates.

Protection of Personal Identifiable Information
It is advisable not to share your personal identifiable information (PII) with persons one cannot trust.

Additionally, one should not share mobile money PIN with anyone under any circumstances.

It is also advisable to make PIN Codes harder for other people to guess. The use of predictable numbers such as dates of birth that can easily be guessed.

Verification of Callers and Texters
Mobile money subscribers must also make it a duty to verify the identity of callers or texters by asking relevant questions and being sure that they are aware of the persons they are talking to, and should avoid giving out too much personal information.

Subscribers must be extremely careful with SMS messages since they can easily contain a phishing link.

Monitoring of Wallet Activities
Subscribers must also regularly review their account details. They must be sure to remember the last transaction on their wallets and develop a conscious attitude to always check their mobile money wallet anytime there is a perceived transaction on the wallet.

Awareness
Knowledge, it is said, is power. Everyone must strive to educate themselves by reading and asking relevant questions to gain knowledge about new fraud trends the best ways to avoid becoming a victim.

Finally, users should quickly contact their mobile operator if there is suspicion of fraudulent activity on a wallet. Every second may count in helping to stop a fraud.

Conclusion
As shown by Bank of Ghana’s reports, Mobile Money Fraud is very prevalent in Ghana and every effort must be made to arrest it, lest it derails the years of efforts made towards promoting financial inclusion, particularly within the informal sector.

Mobile money fraud does not only result in financial loss to subscribers or a mobile money provider, but it also damages the reputation of the service to the customer and leads to mistrust in the financial ecosystem.

The writer, Isaac Obuor, is a Certified Fraud Examiner and Certified Information Systems Auditor.