Clamp down on mobile fraudsters

The increasing use of online banking services and financial digital platforms has given rise to different forms of frauds and scams. Scams and fraudulent activities with regards to mobile financial service are on the rise these days. The media, both the mainstream and social media, are flooded with customer complaints.

A recent report published in this newspaper stated the fraudsters are spreading their nets and using various methods to steal people’s hard-earned money with the number of customers and money transactions via mobile banking significantly rising in recent times.

Mobile financial service (MFS) has brought about a revolution in the country’s financial sector. It has made transactions as easy as pressing a button. MFS is gradually becoming part of the life of the people. Although it started mainly as a tool to facilitate remote transactions, the MFS emerged as an easy alternative to other modes of transactions, such as plastic cards, in retail and online purchases. However, the success of MFS has been mired by frequent reports of fraudulent practices of taking away money from the mobile devices of many of the people.

What happens after the users fall victim to such fraudulent activities is, a majority of them discontinue using mobile financial services. This is because when they complain to the authorities of such occurrences, the latter often fail to take proper action. Different studies found a strong link between the time required to address the victims' complaints and their decision to continue to use MFS—while 95 per cent of the fraud victims who had their complaints solved in a day continued to use MFS, around 30 per cent of the victims abandoned the platform for good because their complaints were not addressed.

According to the report Special Superintendent of Police Muhammad Rezaul Masood, of the CID’s Cyber Crime Division, said many people do not file a case or complaint if the money they lost is a small amount or to avoid legal complications. People do not even file a simple general diary to avoid trouble.

“We have made many arrests at different times. But it’s difficult to prevent such fraudulent activities if the consumers are not more alert,” he added.

Consumers need digital and financial literacy as the incidence of fraud is relatively higher among the less educated users and untrained agents. Therefore, steps need to be taken by the government and the private sector to educate the people about the basic uses of the MFS. Providing training to all the agents is no less important.

Mobile financial services are encrypted with multiple security protocols to ensure safety of accounts as well as all transactions. Scams occur usually when people fall for fraudulent tactics. It is important to know that a financial institution will never call its customers to obtain any personal data or ask for privileged information.

The consumers must be protected from any kinds of fraudulent activities at all costs. There need to be effective complaints recourse channels with trained staff who are efficient in handling fraud and other complaints and dedicated recourse channels for agents.

It should be borne in mind all the mobile phones in the country are biometrically registered and MFS accounts also require submission of national identity cards (NIDs). So, it should not be difficult for law enforcing agencies to track down those involved in such fraudulent activities. But the people need to know where to lodge complaints, and the agencies concerned need to take these complaints seriously. Exemplary actions against the culprits will significantly reduce the types of crimes we are talking about.

We urge for the establishment of a single dedicated regulatory authority is required to ensure adequate MFS user safety across different regions and social groups. The central institutional body must annually measure both the propensity of fraud in the digital financial services sector and explore how the nature of fraud is changing over time.