MACRA to establish digital forensic lab with Malawi Police to counter mobile money fraud

On the commemoration of World Consumer Consumer Rights Day on Tuesday, March 15, Malawi Communications & Regulatory Authority (MACRA) announced several measures to be implemented, which include establishing a digital forensic laboratory with the Malawi Police Service to counter mobile money fraud.

The regulator also announced that the registration of every SIM card through the National Identity, shall include having its intended phone handset be registered as well.

At a press conference, MACRA Director General, Daudi Suleman said this year’s World Consumer Consumer Rights Day is celebrated under the theme ‘Fair Digital Finance’ — which was coined in cognizance of the changing landscape in the marketplace brought about by technological advance.

The technological advancement also brought with it a “proliferation in the cases of cybercrime, especially mobile money fraud, more recently due to the CoVID-19 pandemic which saw an increase in the usage of ICTs”.

Suleman addressing the media

“As a regulatory body, MACRA remains unrelenting and committed to developing systems and frameworks that make the digital space safe for all consumers.”

Thus, as mandated by the Electronic Transactions and Cybersecurity Act, 2016 and the Communications Act, 2016, Suleman announced the measures to country the mobile money fraud that also include enhancement of mandatory SIM card registration; development of SIM card registration regulations and Central Identification Register Regulations.

MACRA will also develop some cyber security rules and regulations as well as formulating a mobile money task force with the Malawi Police Service, National Registration Bureau, mobile network operators and Malawi Prisons.

Malawi Prisons has been specifically included because the majority of the money fraud is being perpetrated by prisoners — with the suspicions of a collaboration with prison wardens — who facilitate multiple SIM cards for the inmates which are used through one handset.

Thus the provision of having handsets meant for a newly-bought SIM card to be required to be registered as well that include a replacement of a handset thereafter.

Suleman also said MACRA will strengthen activation and enforcement of the law regarding online abuse as well as scaling up capacity building and awareness of the law.

There will also be “appropriate allocation of resources towards the implementation of the law that provides online protection, including training law enforcement officials and strengthening of justice justice institutions to manage and handle reported online abuse cases; tracking mechanisms, investigations and prosecution of online abuses”.

He also announced that MACRA is in the process of setting up a toll-free call centre where the public shall channel their complaints of all online abuses that include mobile money fraud as well as complaints against broadcasters; defamation; spreading of fake news; sharing of pornographic materials and many other online abuses.

A day before the World Consumer Consumer Rights Day, Consumer Association of Malawi (CAMA) issued a statement imploring on the government that — while the digital financial platforms are assisting consumers with affordable and easily accessible financial technologies — they also came with negative implications through fraudulent practices.

“We have noted increases in fraud on both mobile money and other digital financial platforms and it requires consumers to be equipped with knowledge on how to avoid such negative transactions,” said the statement from CAMA Executive Director, John Kapito.

“We are therefore appealing to Government to put in place strong regulatory systems in order to ensure that only genuine traceable business transactions are done online and with reputable institutions in order to allow the growth of these new digital financial technologies that have potential to increase financial inclusion in the country.”

The measures taken by MACRA answers CAMA’s concerns, which Kapito had said consumers need to “appreciate and understand these digital financial platforms while at the same time understand their implications and challenges”.

MACRA also agreed with CAMA’s observation that the mobile money services are hugely benefiting consumers in sending and receiving money locally and internationally as well as cashless local and international purchases.

In his statement, Suleman said World Consumer Rights was inspired by US President, John F. Kennedy in on March 15, 1962 through a special message to the US Congress in which “he coined the four fundamental consumer rights which are the right to safety; the right to be informed; the right to choose and the right to be heard”.

“The consumer movement first marked that date in 1983 and now uses the day to ensure consumers have all the necessary information to make informed decisions.

“Digital financial services and financial technology have had a significant impact on consumer behaviour in the world with an increase in the uptake of e-commerce and e-trade.

“According to the Reserve Bank of Malawi’s National Payment System report for the second quarter of 2021, Malawi has an estimated 9.3 million non-Bank mobile money subscribers and 115,435 mobile money agents.

“Despite the cardinal impact, the uptake in digital financial services has had on consumers, the space has created new risks along with exacerbating traditional risks that can lead to unfair outcomes for consumers and leave those who are vulnerable behind in an increasingly cashless society.”

Thus MACRA coming forward to protect consumers from risks of fraud as well as online abuses that include multiple sharing of pornographic materials; character defamation and many other sharing of fake news.

Just last week, MACRA issued a statement warning the public from possessing any child pornographic material, saying anyone found in possession of such commits a criminal offence and is liable to a fine of K10 million or 15 years imprisonment.

The statement quoted Section 85 as read with section two of the Electronic Transaction and Cyber Security Act that provides that a criminal offence of a child pornography is committed if a person depicts, presents or represents a person under the age of 18 engaged in sexual explicit conduct.

The regulator also encouraged the public to report the nearest police station any person who is engaged in the malpractice, but from now on, people will be using the toll-free call centre.

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