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MTN mobile money system hacked, up to UGX100m stolen

Mobile money agents are the biggest target of fraudsters posing as customers. (PHOTO/FILE)

KAMPALA – Undefined people believed to be crafty MTN Uganda staff manipulated the mobile money system– and stole up to UGX100m on Easter Monday, PML Daily has established.

News of the scam broke only on Thursday, April 25 but top managers have known about it since Tuesday this week. And as MTN struggles to manage the fallout from the scam, we have spoken to sources that preferred anonymity within MTN that explained to us how it happened.

Sources say the network was turned off as money was being diverted.

The source said usually unscrupulous MTN staff exploits the loopholes in the system and divert Agents money.

Meanwhile, sources have told us that MTN Uganda is engulfed in tension as a result of the scam coming to light. On Thursday, the company’s top management was locked in meetings and the issue was high on the agenda.

We have been told that MTN is yet to decide whether to hold its internal audit department responsible for the mess that has so far cost at least three senior staff their jobs.

More staff are expected to get the sack as investigations unfold.

MTN Uganda’s spokesperson Justina Ntabgoba said the currently investigating the scam and that she would get back to us.

Industry sources have told PML Daily that the scam brings into focus the issue of regulation. The question as to how the mobile money service is to be regulated has been around for a while with no convincing answer. Both Bank of Uganda and the Uganda Communications Commission share some powers to regulate the service. But there has been no comprehensive law or policy on such a critical financial service.

However, Bank of Uganda Deputy Governor Louis Kasekende said this is bound to change with the enactment of the National Payments Systems Law that will have the Bank taking sole responsibility for regulation and supervision of the mobile financial services.

The company agents and vendors who lost their money in the scam are demanding for their immediate refund.

They have recommended that the company intensify security around their systems as the agents are now experiencing reduced business performance due mainly to the criminal activities.

Recently, a number of people stormed their offices, claiming that big sums of money were withdrawn their Mobile Money accounts without their consent, putting the Telecom giant MTN Uganda in the spotlight.

In 2016, MTN was accused of creating fake money value to the tune of UGX21b, which was transferred to its mobile money shops. It was further alleged that MTN created an entity called ‘MTN Corporate Liquid Fund’ as a super-agent for transactions which were a form of illegal overdrawing of its e-accounts.

However, MTN Uganda later said the fictitious UGX21 billion was orchestrated by fraudulent staff and not sanctioned by the telecom company.

“Our staff created false value, they then went to normal existing agents who colluded with them to go and demand money. They deposited this float to an agent. The agent went to Stanbic Bank and said; ‘you see I have this transaction from MTN, can you pay me?’ Stanbic paid them,” the company said in a statement.

The mobile money sector is dominated by two telecoms, MTN Uganda and Airtel, who together account for 99% of mobile money agent market presence.

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