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How lack of data laws exposes Kenyans to fraud : The Standard

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Residents of Nakuru during public participation on Data Protection Bill, 2019. The bill was aimed at safeguarding personal data. [Mercy Kahenda, Standard]

Last week, this writer received a phone call from someone supposedly calling from the Safaricom customer care centre.

The caller addressed the writer by his full name and said his line had been registered twice and that they needed him to verify his registration details, failure to which his line would be blocked.
The caller cleverly imitated the demeanor of a customer care agent and there were even voices of other “call centre agents” in the background on similar calls.
However, the phone number used to call was a personal line and the “customer care agent” grew defensive and aggressive when this writer asked for verification that they were indeed calling from Safaricom, and the line abruptly went dead.

SEE ALSO :CS Yattani urges taxman to foster collaborations

A subsequent call to Safaricom’s helpline established that the caller was a fraudster who was after the customer’s PIN number to gain access to his M-Pesa account.
This is just one of numerous cases where fraudsters have obtained the personal data of Kenyans and attempted to use the same to dupe unsuspecting users to divulge information that can be used to access their mobile money accounts.
In the past few years, Kenyans have grown accustomed to receiving unsolicited text messages from betting companies and supermarkets promoting their wares or prompting them to sign up for a service.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.

Recently, fraudsters have upgraded to making phone calls that can be difficult to distinguish from legitimate calls from service providers given the fact that the callers appear to have intimate details of their targets.
Lack of a data protection law and lethargy among policymakers and regulators in the ICT ministry has exposed Kenyans to extortion from fraudsters and exploitation of their personal data by both local and international service providers.

SEE ALSO :Wanted billionaire steps down as Janus Continental Group chair

In the 2017 election, some officials of the Independent Electoral and Boundaries Commission (IEBC) sold the personal data of millions of voters, including names, phone numbers, and geographical locations to political aspirants.
The information was then used to spam users with campaign messages in the days running up to the elections.
Bright Mawudor, head of Cyber Security Services at Internet Security says Kenyan companies and public agencies hold a lot of data on their consumers and the biggest threat to data breaches are insiders.
“Most of the cybersecurity issues we have come across are caused by insiders,” says Dr Mawudor.
“You have a situation where former employees or those that are disgruntled collude with outsiders to leave systems exposed or install malware that allows Sh110 trillion lawsuit for allegedly violating the data privacy of millions of its consumers.

SEE ALSO :KRA targets 600 individuals in tax evasion crime

In the ongoing legal dispute filed at the High Court, a Safaricom subscriber accused the company of breaching the privacy of 11.5 million of its customers by exposing their sports betting history and biodata.
The applicant, Benedict Ndung’u, says he was approached by an individual who had in his possession the personal data of more than 11.5 million Safaricom subscribers.
“The data which the petitioner herein viewed personally was specific to gamblers who had used their Safaricom mobile numbers to gamble on various betting platforms registered in Kenya,” he says in his petition.
The data allegedly contained specific identifying details of subscribers including full names, their mobile phone numbers, gender, age, identity numbers, passport numbers as well as the amounts gambled.
Also included in the data was the make and type of device used by the subscriber as well as the location of the subscriber.

SEE ALSO :Wanted billionaire Humphrey Kariuki granted Sh10M cash bail

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In a related case, two Safaricom employees have been charged for trying to obtain Sh300 million from the company by illegal means.
Simon Kinuthia and Brian Wamatu were accused of transferring privileged information on a subscriber from the company’s database and sharing it with an unauthorised person.
A new report by the United Nations Conference on Trade and Development (Unctad) says increasing digitisation by businesses, governments and individuals has created a data economy that is expanding at unprecedented speed.
“Global Internet Protocol (IP) traffic, a proxy for data flows, grew from about 100 gigabytes (GB) per day in 1992 to more than 45,000 GB per second in 2017,” says the report released last week.
“The world is only in the early days of the data-driven economy; by 2022 global IP traffic is projected to reach 150,700 GB per second, fuelled by more and more people coming online for the first time and by the expansion of the Internet of Things (IoT).”
However, much of this data and the profits accruing from it is concentrated on a handful of corporations mainly in the US and China, raising concern that citizens in developing countries are losing out on both the resources and profits that accrue from the digital data they generate.
Unctad Secretary General Mukhisa Kituyi was in Nairobi last week where he reiterated that regulators in developing countries need to review current corporate and taxation legislation to ensure income inequalities are not exacerbated. 
“We are seeing a phenomenal expansion of not just digisation of data but also platformisation of data,” he said.
“From a developmental perspective, this means all of us are voluntarily surrendering out private raw data; personal information, business information and national statistics for free.”
Dr Kituyi said tech giants mine, analyse and monetise the data obtained for free, without any profits going back to users or the countries in which they operate.
“Eventually it goes beyond the abilities of national jurisdictions and it is going to reshape discourse and how we restructure regulation and corporations across borders, balancing between local regulation and fair taxation,” he said.

Expanding technologies

Kenya’s policy makers, despite talking big on the advances the country has made in expanding digital technologies in the region, are playing catch up to local and international technology service providers.
The Communications Authority of Kenya, (CA) has for the past two years failed to appoint a consultant to draw a study to inform the parameters for bringing tech giants under a regulatory regime covering tax and data.
The Data Protection Bill 2018 has been in development for more than five years without any significant headway.
At the same time, the National Treasury proposed the introduction on taxes on digital economic activities in the Finance Bill 2019 to increase revenue collection.
Last week, the Kenya Revenue Authority (KRA) kicked off the search for a technology service provider to install a monitoring and payments system to track transactions between local and international digital merchants and their customers.
The tax collection system will entail an integrated payment gateway solution to identify and authorise payments through settlement of data to and from merchants’ online portals to merchants’ banks.
KRA wants the system integrated with all internal revenue systems for data sharing purposes and updating of taxpayers’ ledger accounts, a requirement bound to raise opposition from service providers.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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