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Equity Bank, headquartered in Kenya, recently encountered a significant setback as hackers orchestrated a debit card fraud, resulting in the loss of $2.1 million. The incident prompted the bank to escalate the matter to the Directorate of Criminal Investigation, providing detailed documentation of the fraudulent transactions spanning over 500 bank and mobile money accounts.
Swift Action and Arrests
Responding promptly, Equity Bank froze all accounts implicated in the fraudulent activity and apprehended 19 individuals linked to the scheme. Law enforcement authorities are actively pursuing further leads to bring all involved parties to justice.
Modus Operandi and Investigation Findings
The fraudsters utilized a “card-not-present” method, utilizing stolen card information for online purchases to deceive victims. Equity Bank’s preliminary investigation revealed that between April 9th and 15th, 2024, approximately KSh 179.6 million ($1.3 million) was fraudulently transferred to 551 accounts within the bank. Safaricom, the telecommunications giant, and eleven other commercial banks were also affected, with fraudulent transfers totaling KSh 102 million ($775,375).
Collaboration and Regulatory Response
Equity Bank is actively collaborating with Safaricom and other affected banks to trace the illicitly diverted funds. Moreover, the incident underscores the pressing need for enhanced cybersecurity measures in Kenya’s financial sector, particularly in light of recent legislative developments.
Rising Concerns and Legislative Action
The surge in fraudulent activities poses a significant challenge to Kenya’s financial landscape. Over the past three years, the Financial Reporting Centre (FRC) flagged illicit transactions exceeding $600 million, attributed to credit card fraud, corruption, and terrorism financing.
In response, the Kenyan National Assembly approved the Computer Misuse and Cybercrime Regulations, 2024, aimed at bolstering cybersecurity defenses. These regulations establish a comprehensive framework for combating cyber threats, including scams, identity theft, hacking, and Internet fraud. By enforcing stringent measures and swift action against cybercriminals, the regulations aim to safeguard the integrity of Kenya’s financial infrastructure and protect citizens’ data.
Source: Innovation Village