Discover the shocking truth behind the Fuliza scam and learn how 500 million Kenya shillings was lost. Read this blog to get the inside story so as to better understand and protect yourself from similar financial threats in Future.
Introduction
Fraudsters have been operating in Kenya for many years, using various tactics to defraud innocent people of their hard-earned money. The Directorate of Criminal Investigations (DCI) uncovered a massive fraud syndicate in Nakuru and Trans-Nzoia counties that had been operating for some time now in Kenya. The group of eight scammers, aged 24-30, led by the mastermind Peter Gitahi, had fraudulently obtained close to 500 million from the mobile lending platform.
What is Fuliza and how does it work
Fuliza is a digital lending platform that allows customers to access quick and easy loans using their mobile phones. To use the platform, customers need to have a registered M-Pesa account and be able to access the platform via the M-Pesa menu. Once they have accessed the platform, they can apply for a loan which will be disbursed to their M-Pesa account within minutes. The loan can then be used for various purposes such as paying bills, buying goods and services, or even withdrawing cash to their personal mobile money accounts.
Unravelling of the Fraud Syndicate
In August 2022, DCI officers began tracing the activities of the fraudsters after detecting an unusual anomaly in the rate at which money was being borrowed through the platform from the same regions. It was later discovered that over 123,000 mobile phones had been registered and taken loans in January alone 2022. After thorough investigations, detectives uncovered the shocking truth that all the sim cards had been registered by the same person, the mastermind “Peter Gitahi”.
The modus operandi of the fraudsters involved creating and registering numbers that were then sold to acquaintances in Nakuru. The acquaintances would then use the numbers to carry out the scamming. Additionally, some other lines had been registered as Safaricom agents, where the borrowed funds would then be deposited into personal bank accounts disguised as M-Pesa float. The fraudsters would then increase their borrowing limit by borrowing and repaying back, repeating the process until they maximized the borrowing capacity of each line, before finally throwing the lines.
Arrest and Confiscation of Evidence
The DCI investigators finally caught up with the mastermind Peter Gitahi in Kitale, where he was arrested along with the other members of the syndicate, including Isaac Kipkemoi, Gideon Rono, Maxwell Kibuthu, Gideon Kiru, Moses Rono, Collins Kipyegon, and Edwin Cheruiyot. At the time of their arrest, the fraudsters were found with thousands of Airtel and Safaricom sim cards registered by fraudulent identity cards, six laptops, over 40 mobile phones, seven routers, over 1,000 Safaricom subscriber registration forms, over 200 ATM cards from major banks, a Toyota Mark X, a Probox, two motorbikes, and 14 Mobicom phones used in registering.
The extent of the damage
The extent of the damage caused by the fraudsters is yet to be fully established. However, the fact that they had obtained close to 500 million from the mobile lending platform is a clear indication of the scale of the problem. The impact of their actions on the victims, especially those who took loans through the Fuliza platform, cannot be underestimated.
Aftermath of the arrests
The arrests of the fraudsters have been a major win for the DCI and the fight against fraud in Kenya. The confiscation of evidence, including the thousands of sim cards, laptops, mobile phones, and ATM cards, will go a long way in helping to unravel the extent of the damage caused by the fraudsters. It will also help to prevent similar cases in the future by serving as a deterrent to potential fraudsters.
What Can be Done to Prevent Similar Scams in the Future?
To prevent similar scams in the future, it is important for digital lending platforms to have strong security measures in place to protect their customers and their funds. This includes using encryption to secure personal and financial information, implementing two-factor authentication for sensitive transactions, and carrying out thorough background checks on loan offers and loan providers.
Conclusion
It is also important for customers to be vigilant and aware of potential scams, especially those that ask for sensitive information such as M-Pesa pin numbers. Customers should always verify the authenticity of loan offers and messages claiming to be from their digital lending platform before providing any personal or financial information.
FAQs
Who were the fraudsters in the recent fraud case in Kenya?
The fraudsters were eight individuals aged 24-30 from Nakuru and Trans-Nzoia counties led by Peter Gitahi the brains behind it all.
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