Safaricom wins against trader it cut-off from network

The High Court has struck out a case filed by an online trader challenging a decision by telco Safaricom to block his telephone numbers and freeze his M-Pesa mobile money accounts over allegations that he engaged in fraud.

Justice James Makau said the case was prematurely filed in court because the businessman, Mr Anthony Mwangi Ngigge, trading as Tiindah Online Shop, had not exhausted alternative dispute resolution mechanisms.

Mr Mwangi claimed that Safaricom violated his constitutional rights by blocking his two telephone numbers and two M-Pesa till account numbers over alleged fraud through the NCBA Bank mobile money platform.

Fraudulent transactions

However, Safaricom told court that the freezing of the accounts was caused by a report dated October 23, 2020 from NCBA Bank on alleged fraudulent transactions involving NCBA Loop accounts and Mr Mwangi's telephone numbers.

Through its senior legal counsel for litigation, Mr Daniel Mwanja Nduba, Safaricom said the bank indicated there were fraudulent transactions processed from Loop accounts via bank-to-customer to 250 M-Pesa wallets between October 20 and 22, 2020.

Mr Nduba said Safaricom's risk department investigated the allegations of fraudulent activities or transactions in its M-Pesa system, which revealed that Sh16.2 million had been processed from the NCBA Loop accounts through Safaricom’s M-Pesa system using the 250 mobile numbers. Safaricom proceeded to suspend the numbers, which included Mr Mwangi's two telephone lines.

On the basis of its internal investigation and the report, Safaricom also blocked the trader’s telephone number and barred him from registering any new telephone numbers using his (personal identification) details.

Similarly, it froze his M-Pesa till accounts trading as Tiindah Online Shop.

Terms and conditions

Safaricom said the relationship between the parties was contractual, subject to the M-Pesa customer terms and conditions, as well as Lipa na M-Pesa transacting till terms and conditions for the ownership and use of the telephone numbers.

Mr Nduba said the dispute ought to have been pursued as contemplated by the parties in the terms and conditions of the business agreement, not through court.

According to Safaricom, its actions were justified and relied on a clause in the terms and conditions that compels it by law to suspend or freeze an account if there are reasonable grounds to suspect that the account had been or was being used to receive or send funds in connection with any criminal or fraudulent activity.

However, Mr Mwangi said he registered the telephone lines and the M-Pesa till numbers in 2017 for receiving and making payments for his business.

Lost sim card

He said that on attempting to replace his lost sim card in October last year, he learnt from the Safaricom agent in Juja that the Sim cards for the two telephone numbers had been blocked by Safaricom. He also learnt that he had been blocked and restrained in perpetuity from registering, owning or using any new telephone number registered in his personal details.

He sought to withdraw money from his M-Pesa till numbers, only to be informed that they had also been frozen, he said.

He sought an explanation by writing to Safaricom, but the firm ignored and refused his inquiry, necessitating the court case. He stated that he has been unlawfully deprived of the right to own property and without legal justification or cause.

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