Financial regulators warn of rise in unregulated products

Financial sector regulators have warned the public against the purchase of unregulated and unlicensed financial services and products noting the increasing emergence of fraudulent services in the market.

In a statement to the press, the regulators who include the Capital Markets Authority (CMA, the Central Bank of Kenya (CBK), Retirement Benefits Authority (RBA) and the Sacco Societies Regulatory Authority (SASRA) have summarized the deceitful offerings as those requiring payment in the form of a registration fee while promising an unreasonably high return on investment.

The fraudsters have been found to be operating without physical addresses limiting the traceability of involved parties in a case where transactions fall through.

“The purpose is to warn members of public against the unregulated financial services and remind them to deal only with genuine and licensed financial institutions and entities,” read part of the joint statement.

Financial providers have similarly been urged to play an increased role in the mitigation of the vice by remaining vigilant to any products or services that may mimic the appearance of their legitimate products.

Illegitimate financial services have ranged from online pyramid schemes to credit and savings schemes as well as fraudulent mobile loan applications.

Financial fraud has remained a key concern for government in the recent past with millions of individuals losing plenty in investments to the illegal trade so far.

Regulators are however keen on ensuring a turnaround by instilling discipline in the field promising legal ramifications for participants and engaged-entities with a view to eliminate the vice.

“Appropriate action will be taken against those involved in the provision of unlawful financial services. Members of public should report any such occurrences to the respective financial sector regulators,” the statement concluded.