Parliament probes syndicate allegedly robbing retirees of pension benefits

A suspected fraud syndicate is allegedly targeting retirees who receive lump-sum pension payouts from the government, parliamentarians probing the suspected theft have said.

The Senate is investigating the allegations, amidst claims that fraudsters are accessing the banking details of pensioners in unclear circumstances and defrauding them of their benefits.

Migori Senator Eddy Oketch brought the issue to the Senate’s attention, stating that criminals appear to be accessing sensitive personal banking information.

This access allegedly enables them to monitor transactions and quickly execute fraud immediately after pension payments are deposited into retirees' accounts.

Oketch cited the case of a retired teacher who recently lost her entire lump-sum pension of Sh2.4 million, which had been deposited into her account at a leading bank.

“I am seeking a statement from the Senate Finance and Budget Committee regarding the number of fraud-related cases involving funds held in Absa Bank accounts since 2022, and the status of investigations into each of them,” Oketch said.

The senator also questioned whether the Central Bank of Kenya and the Directorate of Criminal Investigations are aware of these cases and, if so, what actions they have taken to address the matter.

Additionally, he called on the committee to investigate the steps Absa Bank has taken to address the systemic failures that may have enabled the fraudsters to access personal banking details and monitor account activity.

“We would like to know the oversight mechanisms the CBK has put in place to ensure banks take adequate steps to safeguard customer deposits and ensure the confidentiality of personal information.”

Banks must also take responsibility for systemic lapses that result in the fraudulent loss of funds,” Oketch added.

 Narok Senator Ledama ole Kina echoed urged the Senate Finance Committee to thoroughly investigate the matter.

He also called on Absa Bank to enhance staff training to better detect and flag suspicious transactions, pointing out that banks are often quick to question incoming funds but may lack similar scrutiny for unusual withdrawals.

“These are crucial issues to discuss, especially in determining whether we need to develop additional legislation to protect senior citizens,” Ledama said.

“If we don’t, we’ll continue allowing them to fall prey — like a wolf preying on the vulnerable. It’s unacceptable.”

Nyamira Senator Okongo Omogeni called for the CEO of Absa Bank to appear before the Senate to explain the reported incidents, especially those where customers allegedly lose money shortly after leaving the bank.

He raised concerns that some bank employees may be colluding with criminals.

He cited a recent case involving a retired police officer who withdrew cash to pay his workers, only to be robbed of the entire amount just moments after leaving the bank premises.

“We cannot allow the very people entrusted with our money to betray that trust,” Omogeni said.

“We must invite the Director of Criminal Investigations to clarify whether investigations are underway, whether any arrests have been made, and whether reports of insider collusion are being addressed.”

Last year, Treasury CS John Mbadi formed a team to unlock Sh60 billion owed to pension firms. The 18-member multi-agency task force on Non-Remittance of Pension Deductions to Pension Schemes by County Governments seeks to determine the actual pension arrears and develop a strategy to clear them.

This development follows a Senate resolution to have the Treasury form a team to explore ways of clearing the arrears. This is after the Senate County Public Investments and Special Funds Committee, chaired by Vihiga Senator Godfrey Osotsi, probed the huge unremitted deductions.