How Kenyans can avoid mobile wallet and cyber fraud
By Kenneth Mwenda, September 27, 2025Kenya has seen rapid growth in digital financial services over the past decade. Mobile money platforms like M-Pesa, Airtel Money, and banks’ mobile apps have made it easier for people to send and receive money, pay bills, and access loans. However, this growth has come with a rise in financial fraud, especially targeting digital wallets.
The Central Bank of Kenya (CBK) has recognised this risk and is working on new guidelines to protect consumers.The CBK’s initiative is part of the Kenya National Financial Inclusion Strategy 2025-2028.
The focus is on creating clear mechanisms for consumers to get compensated if they fall victim to fraud. Currently, many users of digital wallets lack an easy way to recover lost funds.
The CBK plans to collaborate with other financial regulators and the Competition Authority of Kenya (CAK) to develop a robust compensation framework by the end of 2026.
The framework will also include training for financial institutions, improved complaint management systems, and transparent pricing of digital financial services.
Surveys show why this is necessary
A 2021 study by CAK and Innovations for Poverty Action revealed that 82 per cent of Kenyans received calls or messages from unknown people asking for money or personal information. Scammers often pose as employees of banks or mobile money providers to trick victims.
About 77 per cent of these fraudsters asked users to send money to “reverse” an error transaction, which was fake. Others requested passwords, PINs, or account details.
The financial impact has been significant. In 2024, losses from mobile banking fraud rose to Ksh810 million, a 344 per cent increase from the previous year. Other forms of cyber fraud, such as computer fraud, identity theft, and online banking fraud, have also surged.
According to the 2024 FinAccess Report, nearly 10 per cent of mobile money users reported losing money to fraud, while bank and microfinance customers were less affected, at 1.5 and 1.8 per cent respectively.
Fraud takes different forms
Apart from scams targeting mobile wallets, internal fraud in Saccos and pension schemes affects many consumers. Accidental transfers, phishing, fake investment schemes, and identity theft also contribute to money loss. These issues have made money loss one of the top challenges for users of financial services, after hidden charges, unethical practices, and system downtime.
What can consumers do to protect themselves?
First, it is important to recognise warning signs. Do not respond to unsolicited calls, messages, or emails asking for personal information or money.
Fraudsters often pose as government officials, bank employees, or recovery agents. Never send money to someone promising to recover lost funds; this is a common recovery fraud trick.
Consumers should also keep records. Maintain a timeline of interactions, including names, phone numbers, social media profiles, and screenshots of messages. Store transaction receipts, account statements, and any emails or documents related to the suspected fraud. These records will help authorities investigate and prevent further loss.
Reporting is critical. Victims should contact their bank or mobile money provider immediately. They should also file a police report and report the case to CAK or other financial regulators.
If personal details were shared, users should update passwords, block affected accounts, and monitor credit reports for suspicious activity. Placing a fraud alert on accounts can prevent identity theft from escalating.
Education is another key tool. Consumers should verify the registration of financial advisers or investment firms before engaging with them. They should avoid unsolicited offers, suspicious links, and investment schemes advertised on social media. Simple steps like checking website URLs, confirming business addresses, and sharing warnings with friends and family can prevent many scams.
CBK’s compensation framework
The CBK’s upcoming compensation framework is expected to reduce losses and increase confidence in digital financial services. It will ensure that victims of fraud have clear channels for redress and that financial institutions have proper incentives to strengthen fraud prevention. Until then, consumers in Kenya must remain vigilant, protect their personal information, and report any suspicious activity.
Digital financial services are a powerful tool for economic growth in Kenya, but they require responsibility from both providers and users. Kenyans can enjoy the benefits of mobile banking while minimising the risk of financial fraud by staying informed and cautious.