According to SeneNews, Senegal ’s Special Cybercrime Division (DSC) has put a stop to a vast network of scammers, which included an employee of the mobile money fintech unicorn Wave. The overall cost of the damages incurred as a result of the frauds was estimated to be 150 million FCFA ($264k).

To carry out their acts, the con artists enlisted the help of a Wave employee, who shared some of his customers’ personal information with his associates.

The conspirators then called each subscriber, stating that they wanted to help them stop a fraud attempt. Customers trusted the scammers’ promises, assuming that Wave had access to more of their personal information. After a succession of confidence-building processes, the scammers retrieved each of the customers’ codes and emptied their accounts.

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The swindled customers filed 60 complaints with Senegalese police, according to the authorities. On November 2, the Wave’s agent was arrested along with 13 others in Guediawaye, a town north of Dakar’s city center. All of the defendants are currently facing allegations ranging from gang fraud, forgery, and computer system intrusion.

Orange Money was also said to have been affected by the wave of frauds. 

A Look At What Wave Does

Wave, which is a spin-off from Africa-focused remittance provider Sendwave, was founded by Drew Durbin and Lincoln Quirk who founded Sendwave in 2014. The product was trialled in Senegal as Wave in 2018, however it was still part of the Sendwave ecosystem. Durbin and his team focused on Wave after WorldRemit purchased Sendwave.

The Dakar-based firm has an agent network that uses their cash on hand to service Wave subscribers, similar to PayPal (except with mobile money accounts instead of bank accounts). Users can make free deposits and withdrawals, and they will be charged a 1% fee if they transmit money, according to the business.

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According to Durbin, this is 70% cheaper than telecom-led mobile money, and anytime there is a transfer problem, refunds are issued immediately, unlike with incumbents, who may have to wait several days.

Wave’s technology is also unique in comparison to telecom-driven mobile money. Wave is fully app-based, whereas the incumbents mostly focus on USSD (although there are provisions to use applications). Wave also offers a free QR-card that may be used to transact with an agent if you don’t have a smartphone.

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Wave has been able to drive its expansion to several million monthly active users and billions of dollars in yearly volume by constructing its own full-stack infrastructure — agent network, agent and consumer applications, QR cards, company collections, and disbursements.

For its part, Sendwave delivers low-cost or no-cost remittances to Africa and Asia from North America and Europe. Last year, the YC-backed startup was acquired by WorldRemit, which paid up to $500 million in cash and equity for Sendwave.

Wave frauds Senegal Wave frauds Senegal

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
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