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In recent months, there has been an increase in cheque fraud that has rocked some countries in Africa, especially Kenya. These scams have caused a huge financial burden on people, businesses and the government, and have even resulted in some people losing their life savings. What's worse is that these scams are hard to spot because they are often hidden in plain sight.
In this article, you’ll learn about the different types of cheque scams in Kenya and the steps you can take to protect yourself from becoming a victim. You’ll also learn how to recognize warning signs of fraud, how to protect your business from cheque scams, and tips for staying safe and secure when making payments. With the right knowledge and tools, you can make sure you don’t fall victim to cheque scams.
Recently, there were reports of a chicken syndicate terrorizing farmers in Kenya. The story first broke in December when poultry farmers complained of coordinated efforts to steal their chicken
One victim narrated how, Susan Kamau, the ring leader of the syndicate contacted her for what she termed as a tender to supply chicken to a big hotel in the capital, Nairobi. After taking her prepared chicken to the said establishment, the victim met Susan Kamau, who claimed to have deposited a cheque to the farmer's bank account. The farmer then received a notification from the bank about the same. A while later, while checking the balance, the farmer was surprised to note that the cheque bounced and her money and her goods were lost.
In a separate incident, maize farmers in North Western Kenya are counting losses after a cheque scam hit their backyard. The scammers use the same technique where they collect the produce, give a fake cheque and vanish into thin air.
There are a few types of cheque scams in Kenya that you need to be aware of in order to protect yourself from falling victim. Some, like a 62-year-old farmer, claim to have lost over Ksh. 660,000 ($5,300) to one of the gangs.
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This is arguably the most common type of cheque scam in Kenya. A scammer will promise a large amount of money for a product or service you’re selling and will pay you with a fake cheque that is in excess of the amount you are owed. The scammer will request that you deposit the cheque into your business account and wire them the difference between the amount on the cheque and the amount in your account. Once the cheque bounces and your account is debited, you’ll be liable for the difference.
This type of cheque scam occurs when a scammer steals a cheque and cashes it at a bank or through an online cheque-cashing service. Similar to the fake cheque scam, the scammer will offer you a large amount of money in exchange for a smaller amount. They’ll ask that you deposit the cheque into your account, withdraw the larger amount from the cheque, and wire the difference back to them. When the fraud is caught by the bank, you’ll end up losing the amount you paid as the difference.
There are several ways to spot and avoid cheque scams. Make sure you follow these guidelines to protect yourself from falling victim.
Before accepting a payment from a new or unfamiliar supplier, do your research to make sure the cheque is legitimate. Check the listed bank information against the list of banks in your country and make sure the information matches. You can also check with your local government or banking authority to see if they have any information on the cheque.
If a new or unknown supplier requests a large payment or an unscheduled payment, be wary. Suppliers don’t ask for these things unless they’re trying to pull you into a scam. If you suspect a scam, don’t send the money.
Irrespective of how badly you want to make a sale, avoid accepting a cheque before it clears. If a customer wants your products by a particular date, let them draw the cheque a few days before the intended day. As cheques need three-four days to clear, let the customers deposit the cheques before handing them the products.
With the rise of technology, people can prioritize other payment methods which are faster and safer. For instance, in Kenya, mobile money transfers like M-Pesa are a good option. However, you must be careful as the M-Pesa option also comes with risks like money reversal. To avoid this, ensure there is a paper trail, like receipts, proving a transaction has happened. With this, you can have an easy time proving the fraud should anything go amiss.
Cheque scams in Kenya are on the rise, and they’re becoming increasingly common for individuals as well as businesses. Make sure you follow these guidelines to protect yourself from falling victim to cheque scams and keep your money and products safe.
To make things even easier, you can ensure the payment is done beforehand to avoid falling victim to cheque scams.
