Fraud In Safaricom: UNAUTHORISED MIGRATION OF BETTERSMS SERVICES TO FONE PLANET

Caption: Safaricom CEO Bob Collymore. We have received various fraud reports leaked to us by anonymous sources. As usual, we will expose how Bob’s leadership is not the best as fraud goes on within Safaricom. 

We have received fraud reports revealing a behind the scenes looting and impunity within Kenya’s money spinner, Safaricom.

As we have always said, we will always do everything to reveal some of these things since the media will never expose anything about Safaricom because the company is their biggest advertising client.

This specific report will be directly posted hereunder as exposed by Safaricom Fraud department. The reports will show that Safaricom is now a self-consuming organism and everyone is trying to steal.

UNAUTHORISED MIGRATION OF BETTERSMS SERVICES TO

FONE PLANET

1. BACKGROUND

A review of premium rate services was done by Internal Audit between June – August 2014 and some of the exceptions identified in the processes were forwarded to the Ethics and Compliance department to investigate possible fraud for a number of Content Provider (CPs) accounts. These included BetterSMS, Lyle Kenya Ltd, CrossGate, Tangaza Pesa among others.

In addition, a complaint was submitted to the CEO copied to the Director General of the Communications Authority in early November 2014 alleging that BetterSMS and Safaricom had fraudulently charged subscribers fees amounting to Sh 0.5Billion. The complainant further alleged that BetterSMS was deliberately reinstated after suspension to continue with its fraudulent activities. The complainant also noted that the money charged to the customers had not been refunded to them.

1. FINDINGS

2.1 Charging Subscribers without delivering content

BetterSMS is a Safaricom PRSP offering premium rate services to its subscribers. They have been in operation since June 2010. However their account was suspended on 10th October 2014 after a review found that they had periodically been charging rental fees to subscribers without delivering any content. This suspension included all the services they provided to the subscriber through Safaricom. These included SMS, USSD and IVR codes run by the provider and was implemented by the VAS team on the same day.

When the BetterSMS account was suspended, 2 days later an exemption of suspension was approved for 15 of its short codes as listed on appendix 2 below to allow for a smooth migration to other CPs. This migration period was scheduled to run for one week starting from 6th October 2014. The exception was approved on 3rd October 2014 by Morris Maina the Head of Department – Internet and Content. This exception was executed by VAS team but the request was not raised on BMC Remedy. Activating these specific services for the content provider meant re-activation of the entire account (SCP ID) but denying all other services except the corporate accounts.

Rental fees (without corresponding delivery of content) amounting to Sh 99 Million had been charged to numerous subscribers during the months of May, June and July 2014 for short codes run by BetterSMS alone. 15 other CPs (appendix 4) were noted to have charged similar rental fees during the same months of May, June and July 2014. The system functionality that enables rental subscriptions was disabled on Service Delivery Platform (SDP) in August 2014.

BetterSMS subsequently sued Safaricom claiming, among other allegations, the lack of adequate training on configuration of services on the SDP.

2.2 Charging Subscribers for Gifting Service without consent

BetterSMS, Lyle Kenya Limited and Cross Gate content providers were identified in October 2014 to have been sending content to a few suspiciously-selected lines while indiscriminately charging other Safaricom subscribers (a gifting service). Analysis for the affected numbers has been added as appendix 1. This functionality has since been disabled on the SDP platform. The 3 content providers have been instructed to provide explanations for this occurrence and these discussions have not been concluded as at the date of issuance of this report.

2.3 Unapproved Migration of BetterSMS services to Fone Planet

According to Morris, the exemption from suspension of 15 corporate short codes was approved by Peter Arina, GM – Consumer Business Unit and the CEO. BetterSMS also requested Safaricom for two weeks to migrate the same codes to Fone Planet. A further review on the migration revealed the following;

1. A number of entities later came up claiming to own other short codes through agreements with BetterSMS and they wanted to be allowed to migrate to Fone Planet. Their short codes (See appendix 3) were actually migrated from BetterSMS account to Fone Planet without approval. The related instructions were sent by Shiffira Gakenia of the PRS support team to the VAS support team for implementation on 27th October 2014. A change request was not raised in BMC Remedy as required under the procedure. 
2. Shiffira claims that she misunderstood the instructions given to her by her line manager – Judy Muhoro. Though she claims to have understood that there was an exemption for suspension of the corporate short codes, she did not understand that the other short codes were to remain suspended indefinitely. As a result, she allowed their migration to Fone Planet. All the while though, she kept Judy in copy of the erroneous instructions she issued to Technology to migrate these non-corporate short codes and would have expected that it would have been clarified to her if they were not meant to be executed that way.
3. Shiffira claims that when she noticed that all BetterSMS codes were unusually being migrated to the same CP – Fone Planet, she informed Judy about it but Judy dismissed it as the sole discretion of the partner and Safaricom should not interfere with this arrangement.
4. Fone Planet limited is a CP and was registered in Kenya on 8th April 2013. The company has two directors and one shareholder: Rogers Moturi Ongera, Glorious Kerubo Ndege and Harriet Kemunto Ndege. Their share ownership is 50%, 40% and 10% respectively. Fone Planet became a Safaricom partner to provide premium rate services on 11th April 2014. They made their application to become a Safaricom Content provider on November 2013. Glorious Kerubo, the director of Fone planet coordinated with Harriet Ndege of BetterSMS during migration of BetterSMS short codes. It seems that Fone Planet is just a proxy for BetterSMS.

1. CONCLUSION

The following issues were identified:

1. Several non-corporate services were allowed to run on the suspended BetterSMS account. This means that the content provider still had access to the SDP. This is a future possible avenue for fraud especially due to the fact that the content provider was suspended for the same reasons.
2. Harriet Ndege a shareholder of Fone Planet was also (and probably still is) an employee of BetterSMS at the time of migration. This may imply that this may be a temporal arrangement for BetterSMS to stay in business but using a 3rd party as a proxy. 

1. RECOMMENDATIONS

1. All services transferred from BetterSMS to Fone Planet should be suspended immediately.
2. Any corporates using Better SMS short codes should be requested to migrate to CPs of their choice. They should also only be allowed to migrate once they have paid back in full the revenue share earned on the irregular rental fees charged.
3. Revenue share earned by BetterSMS in respect of rental fees irregularly charged to subscribers should be recovered from Better SMS.
4. All affected Safaricom subscribers should be refunded for the daily rental fees charged without delivery of any content during the months of May, June and July 2014.

1. The payment process for CPs should be modified such that delivery of SMS content to subscribers should be verified in the SDP delivery report before payment to ensure that CPs always send content to their subscribed customers. This applies for subscribable services billed on SMS mobile termination (MT).

1. Lyle, BetterSMS, and Cross Gate PRS providers should be charged in a court of law for electronic fraud – sending content to their numbers and charging other Safaricom subscribers as attached in appendix 1.
2. Creation or modification of new content providers/PRS services should be executed with documented and approved change requests on BMC Remedy. Sufficient reasons should be provided for changes on BetterSMS PRS account after suspension. 
3. Disciplinary action should be taken against Judy Muhoro who failed to ensure that the approved instructions were executed as intended.

APPENDICES

Appendix 1

Attached are the affected numbers and identities as well as rental revenues for recovery for PRS providers abusing SDP functionality.

Appendix 2

Corporate Better SMS accounts not suspended

Appendix 3

Better SMS service codes migrated to Fone Planet;

Appendix 4

Rental revenue to be recovered from content providers