CMA okays collection of investor debit card data to ease refunds
Capital Markets Authority acting chief executive Paul Muthaura. PHOTO | FILE
The Capital Markets Authority has approved stockbrokers to collect debit card details from investors amidst risk of exposing the investing public to breach of personal data and fraud.
The markets regulator sanctioned brokers to demand copies of shareholders’ ATM/debit cards — as was evident in the KenGen rights issue — as a know-your-customer strategy to address the challenge of refunds being wired to the wrong accounts.
“It is in an effort to ensure that refunds for share purchases are paid to the rightful recipients that market intermediaries sought ways to verify client bank account details for channelling refunds directly to the specified bank accounts,” said CMA boss Paul Muthaura in a statement to Business Daily.
Mr Muthaura was responding to concerns over dangers posed by brokers ordering shareholders to attach copies of debit cards on application documents for the recently concluded Sh28.8 billion KenGen cash call.
The upshot of KenGen shareholders giving out their ATM/debit card details is that a third party can use the card number and security code to carry out an online transaction such as paying for goods and services.
Cybercrime experts also warned that with copies of one’s card details, a hacker can clone the card — copying the information to create a new card with similar details and access your account.
Dyer & Blair Investment Bank and Suntra Investment pointed an accusing finger at Image Registrars, saying the registry services provider had demanded the electricity producer’s shareholders provide the copies. But Image Registrars chief executive Lawrence Kibet, once again denied imposing any such condition.
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