High Court Orders CBK to Answer for Mobile Money Scams

The High Court has cleared the way for a constitutional test of Kenya’s digital financial regulations, after retaining the Central Bank of Kenya as a core party to an M-Pesa fraud lawsuit that alleges widespread, systemic vulnerabilities within Kenya's dominant digital payment infrastructure.

• The ruling, delivered by High Court Judge Josephine Mongare, dismissed preliminary objections raised by Safaricom PLC and M-Pesa Holding Company Ltd, which sought to throw out the class-action petition filed by Paula Rogo.
• Rogo initiated the suit after losing Ksh 125,658 to a fraudulent scheme where an imposter capitalized on intimate account details to drain her funds.
• Rogo's petition seeks comprehensive industry reform, including a court-supervised 180-day overhaul of anti-fraud systems, mandatory public reporting of annual fraud statistics, dedicated human-operated reporting lines, and standardized compensation mechanisms for victims of mobile financial crime.

Safaricom and M-Pesa Holding Company had argued that the High Court lacked jurisdiction, claiming Rogo had failed to exhaust administrative channels. They asserted that her complaint belonged either before the Communications Authority of Kenya under the Kenya Information and Communications Act or within contractual dispute mechanisms under the National Payment Systems Regulations that point toward the Central Bank of Kenya.

Justice Mongare noted that dispute provisions under Regulation 4(1) of the National Payment Systems Regulations use permissive language, stating a party "may" refer disputes, rather than mandatory statutory bars that would oust the High Court's jurisdiction. Furthermore, the judge observed that Rogo had fulfilled administrative protocol by formally reporting the theft to the corporate providers, only to be met with months of complete silence and inaction.

The court also took note of a critical admission by the Communications Authority of Kenya, which affirmed that while it supervises telecommunications infrastructure, it holds no mandate over financial transactions. Justice Mongare emphasized that forcing a consumer to seek relief from a body that openly admits its lack of statutory power over mobile money would render consumer protection meaningless. That position leaves the Central Bank of Kenya as the sole regulatory entity responsible for supervising payment service providers and ensuring the safety of public funds flowing through the mobile network.

Crucially, the High Court held that the suit extends far beyond a routine commercial dispute between a subscriber and a provider. Because the petition alleges widespread, systemic vulnerabilities within Kenya's dominant digital payment infrastructure, it directly invokes constitutional guarantees under Article 35 on access to information, Article 46 on consumer rights, and Article 47 on fair administrative action.

With all procedural objections now dismissed, the case proceeds to a full hearing on its constitutional and regulatory merits, placing the framework governing Kenya's digital economy under unprecedented judicial review.