Airtel Money has been compelled to refund a customer nearly two years after he mistakenly sent funds to the wrong number, exposing consumer protection gaps in the mobile money industry.
In a precedent-setting case, the Comesa Competition Commission (CCC) ordered Airtel’s Zambian subsidiary to return $250 (Sh32,300) that a user in the Democratic Republic of Congo (DRC) erroneously transferred in October 2023.
The ruling casts fresh light on a widespread problem in Kenya and across the continent, where telcos routinely decline to reverse erroneous transfers if the wrongful recipient cannot be reached or once the unintended recipient has withdrawn or spent the money.
The consumer protection watchdog of the Common Market for Eastern and Southern Africa (Comesa) has ruled that mobile money companies must refund money sent to the wrong number, whether or not they are reachable, especially if the funds have not been used.
“The Commission further established from jurisprudence that service providers facilitating the transfer of money have an obligation to assist the consumer in the recovery of funds sent erroneously,” the CCC said in a ruling on the case filed by a Zambian citizen.
In this particular case, the complainant was a Zambian residing in the DRC and was trying to send money back home through Airtel’s mobile money service, but the money was sent to the wrong account.
When he complained to the telco’s offices in the DRC, he was told the money had already been withdrawn. He later complained to the telco’s office in Zambia and was informed the number was no longer in service, but the money was still there.
The telco, however, failed to reverse the money despite multiple appeals by the customer, defying its own terms of service, which dictate that it can reverse money sent to the wrong account.
“The Commission was concerned that, if indeed the money was still available on the number of the wrong recipient as alleged by the complainant, the Airtel entities were forcing the consumer to unfairly forego their funds by not adhering to their own Terms to consumers on money reversals,” noted the CCC.
While the case involved telcos in Zambia and DRC, it is a familiar situation to many Kenyans who have often been forced to forgo wrongfully sent money, especially if it has been partly or fully spent or if the recipient cannot be reached.
In Kenya, it’s often a race against time to reverse money sent to the wrong number, because once they withdraw or transfer it, mobile money providers often say it is irreversible.
While some telcos have introduced simpler ways to initiate reversals, users cannot always count on getting their money back when they send it erroneously, as the refund also relies on the goodwill of the unintended recipient.
The Computer Misuse and Cybercrimes Act of 2018 criminalised spending or withdrawal of funds wrongfully sent to one’s mobile money account, but in some cases, the money is spent by the user unintentionally.
For instance, users with an overdraft or ‘fuliza’ are automatically deducted when they receive money, and in such cases, the senders are unable to reverse the transaction even if it went to the wrong number.
Mobile money service providers often inform users to refer such cases to the police, which can be a time-consuming or even a financially heavy activity, forcing many to opt to forgo the funds.
The CCC ruling implies that the telcos are ultimately obligated to recover the funds and return to the client, irrespective of how long it takes, a ruling that could change the reversal policies in the country.
