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MTN MOBILE MONEY FRAUD IS AN EYE OPENER

Posted by: ceoeditor Posted date: June 22, 2012 In: Editorial, Op/Ed

Our lead story this month looks at the mobile money fraud at telecom giant MTN Uganda. We ask the question; who regulates mobile money services and is the regulation water tight?

Apparently, this fraud in an electronic enabled financial service has brought the question of regulation into sharp focus. Media reports have indicated that staff manipulated the mobile money suspense account and stole up to Ushs9bn. 

A suspense account just like is the case in commercial banks is where money from wrongly executed transactions is kept.

A company statement issued publically after the fraud came out in the open said, MTN Uganda detected fraud that led to the loss of Ushs9bn in the Mobile Money business.

The amount arose from MTN Uganda balances on income generated from Mobile Money, not customer funds.

The fraud happened during a systems upgrade when employees took advantage of the gaps and stole the money.

The question as to how the mobile money services should be regulated has been around for as long as the service has been used but there has been no convincing answer.

Both Bank of Uganda (BoU), the financial services regulator and Uganda Communications Commission (UCC) who regulate the telecoms sector, share regulatory powers.

But there has been no comprehensive law or policy on a critical financial service like this to help prevent fraud of this magnitude. This financial impropriety should be an eye opener to the regulators.

What has happened to MTN today could happen to the other telecom companies that provide mobile money services. It would be futile if the scandal blows over, MTN stomachs the loss, the perpetrators are prosecuted and life continues.

The regulators and indeed the telecoms industry have a responsibility to prevent future frauds of this kind and close off all loopholes that crafty staff can use to swindle either customer’s or organizational monies.

Failure to do this will erode public confidence in the service that is critical to especially trade not to mention that it is a tool that is boosting financial deepening.

Speaking about regulation, the National Council for Higher Education (NCHE) has finally granted Makerere University Business School (MUBS) a degree awarding status, not to mention independence from Makerere University.

As such, MUBS as we have come to know it has changed name to become Metropolitan Business School (MUBS). In this issue, we have an interview with Professor Wasswa Balunywa, the man who has led MUBS to this day and has pushed for its autonomy.

After more than eleven years of waiting, the 250 megawatt (MW) Bujagali Power Project is a month away from full completion according to Bujagali Energy Limited (BEL), the owners of the project. Ugandans ought to toast to this wonderful news.