A Kenyan customer who lost millions of shillings to SIM swap fraud has secured a significant legal victory, sending a strong message to banks and telecommunications companies about their responsibility in protecting customers from digital fraud.
The High Court in Machakos has ordered Safaricom and Diamond Trust Bank Kenya (DTB) to compensate a customer who lost KSh 4.42 million after fraudsters took control of her phone number through a SIM swap scheme. Under the ruling, Safaricom will bear 60% of the liability, amounting to KSh 2.63 million, while DTB will cover the remaining 40%, equivalent to KSh 1.79 million.
The case involves Mercy Wairimu Kariuki, a DTB customer whose Safaricom SIM card was fraudulently swapped on February 6, 2022. Kariuki immediately reported the incident, and her phone line was restored the following day. However, on February 8, 2022, she began receiving notifications indicating that millions of shillings had been withdrawn from her bank account through DTB’s mobile banking platform and Pesalink.
According to the court, the funds were withdrawn through several transactions, a pattern that should have triggered concerns and prompted additional verification measures.
In its defense, Safaricom argued that it merely provided telecommunications services and had no control over banking transactions. However, the court rejected this argument, ruling that the fraudulent SIM swap directly contributed to the financial loss suffered by the customer.
DTB also maintained that the fraudsters had used the correct PIN to access the account. Nevertheless, the court held that financial institutions cannot rely solely on PIN authentication when transaction patterns appear unusual or suspicious.
The legal battle has been ongoing for several years. The initial ruling was delivered by the Chief Magistrate’s Court in Mavoko on March 26, 2024, where responsibility for the losses was already apportioned between Safaricom and DTB. Both organizations subsequently appealed the decision, with Safaricom contesting its larger share of liability and DTB disputing any responsibility. The High Court has now dismissed both appeals and upheld the original compensation order.
The ruling comes at a time when Kenya’s digital financial ecosystem is under growing pressure to address rising cases of fraud. SIM swap scams have emerged as a major threat, enabling criminals to hijack phone numbers linked to banking and mobile money services, intercept one-time passwords and transaction notifications, and gain access to financial accounts.
The judgment is expected to have broader implications beyond Kenya, potentially encouraging banks and telecom operators across Africa to strengthen fraud detection systems and improve customer protection measures as digital payments and mobile banking adoption continue to expand.
About The Author
