This report was quite interesting. I wonder from Safaricom perspective whether the risk of leaving the line operational even after the customer reported the same as having been stolen (even without their ID) outweighed the simple move of blocking it? What's the worst that could have happened if they'd just blocked it the first time from an abundance of caution position? 

The inconvenience caused to a user because of the line blockage is a super low risk compared to the potential losses, or in this case, the actual losses that the failure occasioned.

But I am sure some smart fellow at the Telco advised that their terms and conditions covered them in case of losses incurred by clients due the latter's "negligence". Such a counter productive mindset. Thankfully, the courts are correcting these punitive T&Cs one at a time.

On Mon, 10 Jul 2023, 14:24 Ali Hussein via KICTANet, <kictanet@lists.kictanet.or.ke> wrote:
The court has really confirmed who has the Duty of Care on these matters. This is something the telco needs to manage with care as I sense a Class Action Suit in the offing. This is also precedent-setting not just in Kenya but beyond. 

Ali Hussein

Fintech | Digital Transformation                                


Tel: +254 713 601113

Twitter: @AliHKassim

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Any information of a personal nature expressed in this email are purely mine and do not necessarily reflect the official positions of the organizations that I work with.


On Mon, Jul 10, 2023 at 7:59 AM Victor Kapiyo via KICTANet <kictanet@lists.kictanet.or.ke> wrote:
Two recent decisions from the Small Claims Court and the High Court have found Safaricom liable for funds lost in M-Pesa/M-Shwari accounts once the same was reported to the company. 

The most recent case related to an individual whose phone got lost and later KES 751,680 was withdrawn from his mobile money accounts over several days. He reported the same to the company, but for one reason or another, the SIM card was not disabled on time. The High Court on appeal, upheld the decision of the SC court which held that the company owed him a duty of care to act with diligence, and found the company liable for the loss of 452,869, and the customer responsible for the balance of 292,812.


The case is likely to have implications on how telcos manage losses from SIM Swap / mobile money fraud. They will need to act swiftly when such reports are made and take adequate measures to enhance the security of SIMs, or otherwise face an avalanche of lawsuits seeking damages for lost funds. From the decision, it is not enough to blame the customer for being negligent or for telcos to put in clauses in agreements/terms and conditions to avoid responsibility. Anyway, it will be interesting to see whether the company appeals the decision, yet again.

Regards,

Victor Kapiyo
Partner | Lawmark Partners LLP
Nine Planet Apartments, Nairobi | Web: www.lawmark.co.ke 
====================================================
“Your attitude, not your aptitude, will determine your altitude” Zig Ziglar

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