Ruling serves Safaricom dilemma over customer losses on M-Shwari platform

Two recent decisions from the Small Claims Court and the High Court have
found Safaricom liable for funds lost in M-Pesa/M-Shwari accounts once the
same was reported to the company.

The most recent case related to an individual whose phone got lost and
later KES 751,680 was withdrawn from his mobile money accounts over several
days. He reported the same to the company, but for one reason or another,
the SIM card was not disabled on time. The High Court on appeal, upheld the
decision of the SC court which held that the company owed him a duty of
care to act with diligence, and found the company liable for the loss of
452,869, and the customer responsible for the balance of 292,812.

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The case is likely to have implications on how telcos manage losses from
SIM Swap / mobile money fraud. They will need to act swiftly when such
reports are made and take adequate measures to enhance the security of
SIMs, or otherwise face an avalanche of lawsuits seeking damages for lost
funds. From the decision, it is not enough to blame the customer for being
negligent or for telcos to put in clauses in agreements/terms and
conditions to avoid responsibility. Anyway, it will be interesting to see
whether the company appeals the decision, yet again.


*Victor Kapiyo*
Partner | *Lawmark Partners LLP*
*Nine Planet Apartments, Nairobi | **Web:
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*“Your attitude, not your aptitude, will determine your altitude” Zig