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Prisons struggle on mobile money fraud

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MHANGO— Most of the prisons were built a long time ago

The Malawi Prison Service (MPS) is unable to crack down on mobile money fraud engineered from within the walls of its facilities because of lack of money to invest in the improvement of its security systems.

The country is experiencing a rise in cases of mobile money theft, 90 percent of which are emanating from prisons, according to a Reserve Bank of Malawi (RBM) report given to Parliament in August this year.

Wednesday, Public Appointments Committee (Pac) of Parliament members engaged Chief Commissioner for Prisons Grace Wandika Phiri on the matter of poor security in prisons.

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It emerged, during the meeting, that mobile money fraud was flourishing in prisons largely due to lack of proper security systems that could have helped check the fraud.

Pac Chairperson Joyce Chitsulo said, after the meeting, that there was a need to increase the budgetary allocation to the prison service to enable the institution to invest in a robust security system.

“We invited the commissioner to hear from her if she was aware of the phone calls that come from Zomba Maximum Prison. In our discussion, she acknowledged the issue and said they once arrested one prison warder who was aiding prisoners with phones and Sim cards.

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“From what she has told the committee, we cannot say the prison is not doing anything to address the problem. All they need is to be financially empowered to purchase some of the things they need to tighten security,” Chitsulo said.

She added that Pac would continue to monitor prisons on measures being put in place to eradicate the vice.

Centre for Human Rights Education, Advice and Assistance Executive Director Victor Mhango said in a separate interview that structures the country has do not meet the modern standards of a prison.

He said there had been many reports from the Prison Inspectorate of poor security in correctional facilities but nothing had been done to improve the situation.

“We are happy that the issue has come out through Parliament and we hope that the government is now going to do something about it. Most of the prisons were built a long time ago when there were no technologies that we see now. Now the government needs to be thinking of ways of revamping prisons,” Mhango said

In August this year, RBM acknowledged that the country was reporting increased cases of digital financial fraud.

RBM Governor Wilson Banda told the Legal Affairs Committee of Parliament that cases of financial fraud had swelled, such that an off-site analysis indicated that over 200 complaints were lodged with commercial banks in the previous six months.

“Where investigation outcomes revealed that financial consumers lost funds due to negligence or inefficiencies by service providers, the Office of the Registrar [at the central bank] directed concerned financial institutions to refund the victims,” he said.

Banda added that the fraud was happening through bank card use, merchant collusion as well as mobile banking.

“We believe that many Malawians are being duped by fraudsters due to lack of information, necessitating the need for increased digital financial literacy awareness,” the RBM chief said.

The central bank said it was engaging stakeholders, including prison authorities, to bring the situation under control.

Banda also informed committee members that RBM had drafted the Financial Consumers Protection Bill, 2021, which, he hoped, would enhance the mandate of the Registrar of Financial Institutions to protect financial consumers, including users of digital financial services, from risks including fraudulent digital transactions.

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