Online fraud hits Equity Bank

Following claims that over Sh30 million was unlawfully removed from a client’s account via internet transactions, Equity Bank has launched an investigation.

After spotting the oddity, Edith Nakacwa, who has been a customer of Equity Bank since 2019, filed a complaint with the bank’s management.

According to documents, Flavia Adongo withdrew the funds via an online funds transfer program (app) named Eazzy funds transfer as well as mobile money. According to a statement from Equity Bank, the money was taken out between April 14 and April 23 this year.

“I have a savings account with Equity Bank, and I have never had a problem with them since I opened it in 2019.” “I would get an SMS on my phone number, which I used while registering, for every purchase I made,” Nakacwa added.

Nakacwa claims she would do transactions worth more than sh1 million over the counter and transactions worth less than that through an Automated Teller Machine (ATM) at any nearby bank or through an agent.

Nakacwa, on the other hand, was given a harsh awakening on April 23, 2021, when a bank agent on Kampala Road informed her that her account had no money, despite the fact that it had been credited with sh1.7 million the day before.

“I went to Equity Bank in Church House and was told that I sent sh9.5 million to someone named Flavia Adongo, whom I do not know, via the Eazzy app and Eazzy Funds Transfer. I told the manager that I couldn’t because I didn’t have the app and hadn’t used it before. She continued, “I also told them that my account contained significantly more money than the stated amount.”

The manager directed Nakacwa to Denis Obua, the head of security, who validated the fraud through an Eazzy app after verifying the system.

“I also discovered five more comparable allegations from people who had approached the security manager on that particular day. He showed me his bank statement, and I discovered that there had been additional transactions going on without my knowledge,” she explained.

Nakacwa discovered that, in addition to the sh9.5 million, she had received a withdrawal of sh7 million, another of sh5 million, and further withdrawals from her account on April 14, and that the money had been transmitted to mobile phone numbers.

“Excluding charges, the money stolen was Sh21.95 million. He (Obua) also affirmed that the bank is to blame for the loss and that it will be remedied soon,” Nakacwa said.

When Nakacwa returned to the bank on the agreed-upon day, Obua reportedly told her that he had not yet presented the case to the board, much to her dismay.

Obua allegedly told her that he was going to present it later that day and that he would call her thereafter, but he never did.

While she waited for the problem to be fixed, Nakacwa received a text message informing her that another sh500,000 had been taken from her account. When all of the previous withdrawals on her account were made, Nakacwa said she never received a notice.

“As soon as I received the message, I called Mr Obua and told him everything. He said he’d call me back, but he didn’t.

So I decided to tweet about it, tagging the bank in the process. When I returned to the bank the next Monday, I was chastised for tweeting about the problem,” she explained.

Obua made it obvious to Nakacwa that Equity Bank was a large organization and that her money could simply be replaced because it was so small, according to Nakacwa.

“He instructed me not to contact him again and that I should go to Twitter to receive my comments and, possibly, my money. I assured him that I had the freedom to utilize whatever measures I deemed necessary to obtain my funds. I also informed him that I was planning to sue the bank,” she added.

Obua allegedly told Nakacwa that if she went to court, she would lose more money because she would likely lose the case.

Obua grew hostile at that time, according to Nakacwa, and told her not to approach him again.

“He instructed me to contact Miss Doreen, who worked in the (bank’s) marketing department and would report to him. For one week, the lady answered my calls, and then she didn’t.”

This led Nakacwa to return to the bank, but no one spoke to her at this point.

She was so angry that she publicized her predicament on Twitter again, and the bank was forced to contact her, admitting their mistake and promising to fix the problem.

“They instructed me to call once a week and they’d let me know what was going on. My case has been transferred to Kenya for payment approval, they said. My issue has to be reviewed by the board of directors, I was told. They later claimed that the managing director of the bank had the final say,” she remarked.

Nakacwa engaged a lawyer, who complained to Equity Bank and the Bank of Uganda (BoU), the regulator, about her client’s fraudulent loss of money and the bank’s indifference to the problem.

Within a week, BoU responded, stating that Equity Bank would be summoned to explain the situation. The meeting was postponed when President Yoweri Museveni imposed a second lockdown on June 18. On July 30, after the lockdown was lifted, Nakacwa re-started her search for her money.

After putting a lot of pressure on Equity Bank, Nakacwa told Sunday Vision that the problem had been handled and that she had been returned her money.

COMMENTS FROM THE EQUITY BANK

In a phone interview with the New Vision, Camilla Mindru, Equity Bank’s senior communications and marketing officer, acknowledged the occurrence.

She refused to elaborate on the circumstances surrounding the alleged theft of funds from the client’s bank account. She stated that the bank is still looking into the matter.

FRAUD IN THE BANKING SYSTEM

Fraud cases have surged in the financial industry, according to Caroline Marion Acio, head state attorney (forensics) at the Directorate of Public Prosecutions, in part due to a lack of coordination among sector actors.

Managers at financial institutions, she said, must pay special attention to how staff operate information technology systems.

‘In terms of patterns, we’ve seen a lot of trust abuse, which has been the most common type of case we’ve encountered.’ We’ve seen employees from IT departments take billions of dollars from banks and walk away unnoticed. We’ve also seen that when collaboration occurs, it usually involves the entire department,’ she added.

‘In the situations we’ve handled, if a specific bank has been targeted, they bring their data in a nice and orderly manner.’ If it’s a different bank, though, they take their time and deliver the information in a disorganized manner. We want to see the data in a disorganized fashion. We want to see us cooperating so that an assault on one bank is interpreted as an attack on another,’ she added.