The Central Bank of Kenya (CBK) has lost its bid to exit a court case in which an M-Pesa user sued Safaricom over mobile money fraud.

The court ruled that the CBK’s role as regulator of payment service providers makes its presence necessary in the legal dispute because it could be asked to enforce any orders against the telecoms operators.

The petitioner, Paula Rogo, wants the court to order Safaricom and M-Pesa Holding Company to strengthen systems for preventing mobile banking fraud and establish dedicated fraud-reporting channels and teams.

She also wants the companies to introduce transparent and timely compensation for fraud victims, investigate perpetrators and keep affected customers informed about investigations, timelines and possible outcomes.

The court found that in the event it grants those reliefs, the CBK will be required to exercise its supervisory powers over the mobile money operators to ensure compliance with the orders.

“These reliefs fall squarely within the CBK's supervisory mandate,” the judge said.

“CBK is not a party against whom a decree is sought, but its presence enables the court to completely and effectively adjudicate the dispute. I therefore find that CBK has not made out a case to be struck out from these proceedings.”

Ms Rogo moved to court in February 2025, suing Safaricom and M-Pesa Holding Company over an alleged Sh125,658 loss.

She claimed that she received a call from an unfamiliar number from a person who introduced himself as a Safaricom employee.

The caller convinced her he was genuine by sending messages that appeared to come through Safaricom’s official SMS system and citing her M-Pesa balance, recent transactions and frequent contacts.

Believing he was a Safaricom employee, she followed his instructions that ostensibly sought to secure her M-Pesa account.
She lost the money in the process.

Ms Rogo wants the court to declare that the defendants violated her constitutional rights to information, consumer protection and fair administrative action.

Within 180 days, she wants them to establish systems to prevent or reduce M-Pesa fraud, dedicated reporting lines and teams, and fair and timely compensation.

She also wants victims updated on investigation progress and outcomes, and seeks Sh125,658, general and punitive damages and interest.

The CBK asked the court to remove it, arguing that it was not a proper party.

Ms Rogo opposed the application, saying the CBK should guide and support the court because it regulates payment service providers.

“If judgment is entered in the plaintiff’s favour, the CBK would be required to exercise its supervisory powers to ensure the defendants comply with the court’s orders,” the judge said, finding that the regulator had not shown prejudice from remaining in the case.

“Without the CBK, enforcement may be difficult.”

Safaricom and M-Pesa Holding separately challenged the suit, arguing that Ms Rogo should first have used the dispute resolution process under the Communications Authority of Kenya (CA).

They said the dispute fell under the Kenya Information and Communications Act and its regulations, which empower the CA to resolve disputes.

The court rejected that argument, finding that the relevant regulation says a party “may” notify the CA of a dispute within 60 days.

“Regulation 4(1) uses "may" for the initiation of the dispute process, which makes this process optional,” the court said, adding that the High Court retained jurisdiction.

The judge found that the case was not “merely a consumer complaint.”

The case is scheduled for mention on September 17.

→ jwangui@ke.nationmedia.com

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