Fewer Scams, Bigger Losses: Understanding Malawi’s Mobile Money Fraud

A recent report by Times360 Malawi reveals a puzzling paradox in Malawi’s fight against mobile money fraud. Citing the Malawi Communications Regulatory Authority (MACRA), the report said fraud cases in Malawi fell by 63.6% between 2024 and 2025, from 4,883 to 1,779. On the surface, this appears to be a success attributable to awareness campaigns, tighter regulation, and cooperation between service providers and law enforcement.

MACRA’s Public Relations Officer, Limbani Nsapato, confirmed this trend. Malawi Police Service spokesperson Lael Chimtembo also highlighted low awareness, digital illiteracy, and security gaps (despite a decrease in reported scams) as key drivers. Beyond arrests, Chimtembo stressed the need for stronger user education and system safeguards.

However, the reality is more complex than that. In particular, the total value lost to fraud tells a different story. According to the report, the amount lost to fraud rose from K200.2 million in 2024 to K256.5 million in 2025. This suggests that while scams may be fewer in number, they are far more damaging. A simple calculation shows that the average reported loss per case has jumped from roughly K41,000 in 2024 to about K144,000 in 2025. This is more than three times higher, indicating that the scams that are still succeeding are perhaps more targeted, sophisticated, and financially devastating for victims.

What do these numbers mean?

There are several possible reasons. First, as basic scams, such as generic phishing text messages, fake prize calls, and crude impersonation attempts, become easier to recognise, fraudsters are adapting. It would appear fraudsters are focusing on fewer victims transacting larger sums, such as small business owners, high-volume traders, and individuals receiving regular transfers. These scams rely heavily on what is called social engineering.

In cybersecurity, social engineering is the psychological manipulation of people into performing actions or providing confidential information, bypassing technical security controls. Instead of hacking software, attackers exploit human emotions such as trust, fear, and urgency. These tactics include impersonating mobile money agents or authority figures, creating a sense of urgency, and manipulating trust. Most of us have received these fraudulent calls. In the past, prisoners at Zomba Maximum Prison have been implicated in these scams.

The second possible reason is that reporting patterns also play a role. Many Malawians may no longer report fraud cases when they incur small losses because the time, effort, and emotional cost outweigh the value lost. This way, minor scams disappear from the statistics, creating a false sense of improvement, while major losses, such as wiping out savings, business capital, or school fees, remain highly visible.

Public institutions increasingly use mobile money platforms to deliver social welfare cash transfers and humanitarian assistance, as well as to pay for services such as school fees and MANEB examination fees. These predictable flows of funds make individuals prime targets, and a single successful scam can capture an entire month’s support or the cost of missing exams or education altogether. This transforms financial loss into a social justice issue. Fraud becomes a mechanism through which resources intended for the vulnerable and for education are diverted away from those who need them most.

What is to be done?

MACRA would benefit from conducting a comprehensive study to understand this paradox beyond the reported figures. This would inform the best way to tackle the problem. Nonetheless, it is crucial to acknowledge that digital illiteracy and lack of awareness are not merely individual shortcomings, as is commonly believed. These issues reflect broader inequalities in access to education, information, and institutional support. Mobile money systems have evolved from optional tools into essential means of survival. When digital platforms become gateways to basic human needs, the associated risks are woven into everyday life, directly affecting people’s human rights.

Thus, responses require a human rights approach. A human rights approach emphasises safe access to digital financial services as part of the right to social and economic participation. This means responses should go beyond the usual policing and surveillance technologies (sim card and gadget registration, etc.). Institutions must take responsibility for system safety, accountability, and accessibility, which include user-centred dispute-resolution mechanisms that reduce reporting fatigue, built-in system safeguards such as transaction limits and verification steps, and digital literacy initiatives framed as empowerment rather than blame. The usual community workshops and radio programmes can expose scams, especially the psychological tactics fraudsters employ.

Fraud monitoring during transfer periods, rapid-response lines for beneficiaries, and partnerships with civil society can help ensure that those relying on social protection are not disproportionately harmed. Currently, civil society is on the margins of these efforts, but they must be at the centre, as they are critical to effective responses.

As it were, digital finance is becoming essential to everyday survival, and fraud evolves to follow the money. While fewer people may fall for scams, those who do are losing more, and their losses are increasingly intersecting with systems designed to protect the vulnerable. The challenge ahead is to ensure that digital financial systems expand people’s freedoms without quietly shifting new risks onto those least able to bear them.

Chavura’s Rape Song and the Pitfalls of Telecommunication Regulation in Malawi

In telecommunication regulations are meant to correct market failures in order protect and promote interests of consumers and citizens. In an ideal world, regulation is an ideal thing to have. But then ours is not an ideal world – it is a world full of opportunists and self-interested individuals. Governments and those who run its affairs are often worst offenders and therefore least trusted by the public.

Therefore it comes as no surprise in this country that regulations made in the name of protecting interests of Malawians are received with suspicion and derision, by the very same people whose interests the regulation is supposed to protect. Consolidated ICT Regulatory Management Systems (CIRMS), commonly known as “spy-machine” comes to mind. This equipment was meant to be rolled out by Malawi’s telecommunication regulator, Telecommunication Regulatory Authority (MACRA) to, among other things, help the regulator determine if Malawians were being over-charged by telecommunication operators.

Telecommunication firms in the country successfully challenged the rolling out of CIRMS in the courts. The firms argued that the public were not happy with the machine as the regulator had capacity to eavesdrop in on people’s private information.

Perhaps the timing of the CIRMS roll out was poor given that at the time there was a considerable discontent in the country against the government at the time, the tipping point of which was the 20^th July 2011 nationwide demonstrations. Given that other regulations such the 2016 Cyber Security Act also faced public suspicions, the challenge faced by CIRMS could well be because of the country’s political history, which is riddled with leaderships that have not done much to uplift people’s welfare and well-being. Trust is very important for policy implementation.

Malawians could well have genuine fears and such fears are definitely not ahistorical. Yet, telecommunication companies in Malawi could more reasons to stop MACRA rolling out CIRMS than the purported reason that Malawians were against CIRMS. Today Malawians are no longer discussing CIRMS yet some media reports suggests that some of the telecommunication companies are still not satisfied that MACRA has been cleared by the courts to roll out CIRMS. Time will be the best judge how MACRA will use this equipment.

What is known is that MCRA has not had the capacity to have the full information about the industry it regulates. This is why MACRA had to hire services of a Scottish firm in 2017 to assess the real cost of doing telecommunication business in Malawi. MACRA’s Director of Finance, Ben Chitsonga told the local media that the assessment has indicated that for a long time both Internet and phone calls have been very expensive in the country.

Chitsonga was optimistic that data prices would perhaps go gown following the study’s revelations. This shows the important of telecommunication regulation, especially where the regulator has the actual information of the regulated industry – it is the only that the regulator could work in the interest of the public. This is also crucial for MACRA to perhaps try and improve its chequered public image. MACRA acknowledges in its own 2015-2020 Strategic Plan that among its weakness is “inadequate enforcement of regulations arising from loopholes in the Communications 
Act”.

It is not surprising then that the Cyber Security Act was received with public suspicion. Of course the Act has some unambiguous and dubious provisions, which, according to Freedom House, “includes problematic provisions that critics worry will be used to silence dissent, especially as the country gears up for elections in 2019.” Such provisions include “restrictions on online communications to “protect public order and national security,” as well as vague clauses that may enable network shutdowns or blocks on communications platforms.”

These are genuine worries and I share them but then at the same time the Act is necessary in this day and age to counter the changing communication and media environment.

Robert G. Pickard and Victor Pickard in their report on Essentials Principles for Contemporary Media and Communication Policymaking noticed that “policies pursued in the past for broadcasting, telecommunications, and media are often inadequate for contemporary media and communications.” They added: “the complexities of contemporary digital systems and networks, cable and satellite operations, internet-distributed content, social media, and cross-platform activities necessitate different methods to address the issues and challenges they pose.”

The Electronic Transaction has been structured in such a way that it could address contemporary issues such as those being raised by the two authors. So when malawimusic.com allowed Mwiza Chavura to promote his song perpetuating rape, and one would say outright violence against women on their website, one would think that MACRA was going to act given that the Cyber Security Act has necessary provisions allowing it to intervene and protect the public from contemptible content and material such as Chavura’s song.

MACRA has missed an opportunity to gain some of its much-needed public trust and also to showcase that the Cyber Security Act is not merely there to muzzle freedom of expression as many fear. Instead, it is the public outcry that has forced the police in the country to arrest the artist charged under section 179(1)(a) of the penal code which penalises production of obscene material; when the Cyber Security Act has provisions in sections 24, which among other things limits freedoms of communication in order to “prohibit incitement on racial hatred, xenophobia or violence” and to “prohibit justification for crimes against humanity.”

Malawi on the Internet, It’s Getting Worse

Freedom House’s Freedom on the Net, 2017 report shows that 2017 was, as Wire.com puts it, “terrible year for Internet freedom”. The report shows that almost half of the 65 countries assessed in 2017 experienced a decline in Internet freedoms during the assessment period. Less than one-quarter of users reside in countries where there are “no major obstacles to access, onerous restrictions on content, or serious violations of user rights in the form of unchecked surveillance or unjust repercussions for legitimate speech.”

Malawi is among the countries assessed and it is categorised as “partly free”. This category was arrived at for two distinct reasons: the first one is not much different from many countries assessment in the report; it has to do with direct government interference. The assessment finds that there were few cases where online news was subjected to “government manipulation”; the arrest of three opposition MPs over a WhatsApp conversation; and various provisions in the Electronic Transaction and Cyber Security Act, 2016, which are deemed as punitive and could be used by the government to “censor online content and dissent.”

The second reason is what the report calls the “availability and ease of access”. The report indicates that average connection speeds in Malawi have decreased from 1.8 Mbps (mega bit per second) in 2016 to 1.3 Mbps in 2017 – comparing the average connection speeds to global average of 7.0 Mbps, one could argue that Malawi really doesn’t have Internet to facilitate any meaningful development. The report observes that this means that Malawi has one of the “lowest and slowest growing rates of the Internet in the world, in stark contrast to the exponential growth in access among its neighbouring countries on the continent.”

For patriotic and proud Malawians these finding are unwelcome, of course yet the real problem is that Malawi government and its policy makers still treat access to the Internet as a luxury that should be punished with punitive tax measures ignoring the fact that Internet is a key driver of socioeconomic activities and therefore, national development. In this day and age, a country cannot attract investors if it doesn’t have stable, affordable and standard Internet connection speeds. Gone are the days when Internet could be viewed through the lens of Facebook and other social media platforms where citizens go pastime, entertainment and gossip.

The only time one hears Malawi government officials talking about the Internet is when someone in the position of power, usually politically connected wants social media regulated or some aspects of banned. Do Malawians really want to start this conversation when the Internet has not really taken off in the country? Such approach only reduces the discussion to issues of social media abuse, which only begets the questions of censorship and tight control while ignoring the crucial issue of access and infrastructure development that would increase access quantitatively and qualitatively for all Malawians and not the privileged few.

The Freedom House reports notices that the poor growth rates of Internet and mobile phone access in the country are largely a result of the high service costs for consumers. This include “a 17.5% VAT on mobile phones and services, a 16.5% VAT on internet services and an additional 10% excise duty on mobile phone text messages and internet data transfers.”

If one adds this, it comes up to 44% duty on Internet and mobile phone access in the country, ultimately making Internet and mobile phone access a luxury for the majority of Malawians; and, as noticed by the report: “shutting [majority of Malawians] out of an increasingly digital world of important services like mobile banking and money services that could help lift them out of poverty, as well as access to essential communications platforms.”

It is easy to blame poverty in such cases, as the report has done to an extent, yet measuring by the amount of tariffs Malawians pay to access mobile phones and the Internet, Malawi government policies have not been helpful in trying to bring Malawians online. This is not only reducing Malawi into a disconnected country but also a tiered society between the haves and the have-notes. Unfortunately, even the haves have little to celebrate as the expensive Internet speed is “frustratingly slow” and is decreasing due to “poor infrastructure management and lack of investment.”

Interestingly, Malawi government is aware of the importance of ICT for national development, this is clearly stated out in Malawi’s National ICT Policy, 2013. In its preface the policy states out: “ICT is essential for the sustainable development of Malawi … Implementation of ICT policy is encouraged by the prevalent political will existing in the country, which has seen the ICT sector being recognised as on the priority areas with potential of turning around the economy….”

Similarly, Malawi’s telecommunication regulator, MACRA has indicated in its 2015 – 2020 Strategic Plan that its “vision” is “universal access and usage of ICT services in Malawi.” And its “mission” is “to facilitate the development of the ICT Sector through efficient and effective regulation and research.”

The irony is that access to ICTs, particularly mobile phone and Internet services has not improved since 2015 when Malawi government imposed 10% VAT on an industry. This suggests that all these policy documents on ICT are merely a window dresser. The amount of VAT the government is getting from the industry indicates that Malawi government is mainly interested in making money—through taxes and operating licences while ignoring the benefits of ICT to the socioeconomic development of the country and its people.