CA fights SIM Card fraud class action suit


The Communication Authority of Kenya headquarters at Westlands, Nairobi. FILE PHOTO | LUCY WANJIRU | NMG

The Communications regulator has opposed a class action suit filed by a victim of SIM-swap fraud saying the case was filed before the wrong forum.

Communications Authority of Kenya (CA) says in reply to the case filed by businessman Abdi Zeila that the issues raised in the suit fall within the mandate of the Communications and Multimedia Appeals Tribunal.

The regulator further says the tribunal has the jurisdiction to deal with such matters as set out in sections 102A and 102F of the Kenya Information and Communications Act (KICA).

Mr Zeila accuses the CA of being negligent of its regulatory duties by allegedly failing to ensure Safaricom is providing services that are secured from fraudsters.

The CA, however, says Mr Zeila has not followed the procedure set out in the KICA (Consumer Protection) regulations and KICA (dispute resolution) regulations of 2010.

“The plaintiff’s suit offends the doctrine of exhaustion of remedies to the extent that it invites the honourable court to interfere with mandates of the legally recognised tribunals,” the regulator said.

He claims to have lost nearly half a million shillings through the scam on March 28, last year after fraudsters withdrew Sh373,000 from his bank account at NCBA -- which has been linked to his mobile phone, took a mobile loan of Sh66,440, another Sh24,000 from KCB-MPesa and a Fuliza loan of Sh12,000.

SIM swap scams occur when a criminal convinces a mobile operator to issue them with a replacement SIM card by claiming a false identity and pretending that their mobile phone has been either lost or stolen.

The regulator further says the case does not disclose a reasonable cause of action against it as Mr Zeila has not set out with specificity the acts, which it failed to perform or breach of statutory obligations.

Mr Zeila wants Safaricom compelled to refund him the Sh495,651 which was allegedly stolen from him by fraudsters, and also pay him damages for breaches.

He says he is aware that SIM swap is not possible unless someone has access to the Safaricom system and the targeted subscriber’s personal data required for purposes of effecting SIM registration.

Mr Zeila claimed in the court documents that the fraud happened while he was out of the country on holiday.

The businessman accuses Safaricom of failing to securely process and control his data and in the process, breached its obligations under the law, leading to financial losses.

Safaricom is yet to respond to the suit that looks set to be keenly watched in Kenya’s legal circles and the fintech space.

Mr Zeila says the CA failed to exercise its watchdog role and should bear the burden of the compensation that would come from the class action suit.

“A declaration that the 2nd Defendant (CA) failed to exercise its regulatory mandate in a diligent manner and failed to hold the 1st Defendant to its licence conditions and by this failure caused the Plaintiff (and members of the class) financial losses,” said the businessman in court affidavits.

He reckons his SIM swap occurred when he was on a roaming network outside the country, arguing that Safaricom should have known he could not process the transaction while on a network outside Kenya.

The businessman reveals he was in possession of his original national identification card and passport when the fraud happened.

He says in court papers that Safaricom has a duty to ensure his personal data are kept in a secure and confidential manner.

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