Senators have raised alarm over fraudulent schemes in which bank security systems are reportedly breached, leading to the theft of pension funds belonging to thousands of retirees.
Speaking on the floor of the Senate on Thursday afternoon, Migori Senator Eddy Oketch moved a statement urging swift action from fiscal authorities, investigative agencies, and the House Finance Committee to investigate emerging fraud cases that have left retired government workers penniless after losing their entire life savings.
Oketch further informed the house of a citizen whose case had reached him, who reportedly lost over Ksh2 million from one of the local banks.
According to the Senator, the retired teacher, Violet Akoth Nyatol, recently lost Ksh2.498 million as part of the scheme that has sent shockwaves to thousands of retirees and their beneficiaries.
In his demands, he called for the summoning of the bank to shed light on how the money was moved from the bank account of the lady.
Narok Senator Ledama Olekina backed the concerns, revealing that senior citizens had fallen victim to financial scams allegedly involving local financial institutions, highlighting the growing threat to pensioners’ financial security.
Olekina described the situation as deeply disturbing, noting that elderly Kenyans who had worked for decades were now seeing their hard-earned pension vanish in seconds due to cybersecurity loopholes.
''It is disheartening to hear that senior citizens are now falling prey to fraudsters who are targeting their retirement income. If someone has worked hard their whole life, only to lose everything upon retirement, what future are we giving them?'' Olekina asked.
The senators also demanded that the Competition Authority of Kenya (CAK) be summoned before the Finance Committee to explain its role and whether it's doing enough to protect retirees.
''I hope the committee will engage the CAK to find out if they are merely collecting revenue or actually educating senior citizens on financial safety and fraud prevention,'' Olekina added.
Additionally, Olekina asked for the Central Bank of Kenya (CBK) to be compelled to provide a statement on what its policy is on such fraudulent schemes.
Further, the senators demanded that the Directorate of Criminal Investigations (DCI) be compelled to do investigations to lay bare the tricks the fraudsters use.
Under the Banking Act (Cap 488), the CBK is empowered to supervise and regulate financial institutions to maintain a stable and efficient banking system. This includes issuing prudential guidelines that financial institutions must adhere to, ensuring they implement robust internal controls and risk management systems to prevent fraud and unauthorised transactions.
Banks are mandated to establish and maintain effective systems to detect and prevent fraudulent activities. This includes implementing secure authentication processes, monitoring systems for unusual transactions, and promptly addressing any breaches.
In cases of unauthorised withdrawals, banks are expected to investigate promptly and take corrective actions, which may include reimbursing affected customers, depending on the circumstances and findings of the investigation.
