Stanbic Bank Kenya to Refund Customer Sh511,000 After OMNI Banking Fraud
Stanbic Bank Kenya has been ordered to refund Sh511,000 to customer James Njoroge after the Small Claims Court found that weaknesses in the lender’s identity verification and digital onboarding systems enabled fraudsters to access his account and transfer Sh1.001 million.
The court, in a judgment delivered on August 25, awarded Mr. Njoroge the Sh511,000 balance that was not recovered after the fraud, together with interest at 12 percent per annum from the date the suit was filed.
The judgment found that Stanbic failed to apply adequate safeguards when a new digital banking channel was activated on an account that had operated without mobile or internet banking for more than 10 years.
The case arose after Mr. Njoroge was robbed, drugged and left incapacitated by a gang that stole his mobile phone, national identity card and other personal documents.
The fraudsters subsequently used his stolen identification details and access to his phone to register an OMNI digital banking profile in his name.
Fraudsters Activated Stanbic OMNI Profile
According to the case details, the fraudsters registered the OMNI banking profile at 2:48 pm on July 13, 2025.
The account had previously operated without mobile or internet banking for more than a decade, meaning the registration created a new digital access channel to an account that had not used such services.
The criminals used Mr. Njoroge’s stolen identity information and an SMS one-time password (OTP) sent to the stolen phone to complete the registration.
After gaining digital access, they processed three transfers between 3:09 pm and 3:25 pm. A total of Sh1.001 million was transferred to an unrelated account.
Mr. Njoroge’s wife notified Stanbic at 5:19 pm after discovering the incident. The bank subsequently restricted the account and recovered Sh490,000.
This left Sh511,000 unrecovered, which became the amount at the centre of the court dispute.
Court Rejects Stanbic’s Fraud Defence
Stanbic argued that the transactions had been completed using valid customer credentials and that the fraud had not been reported quickly enough.
The court rejected those arguments. It found that the use of identity details and an SMS OTP sent to the stolen phone was not sufficient to safely establish the identity of a customer when opening a new banking channel.
The court also considered the circumstances surrounding the transactions, including the fact that the account had operated without mobile or internet banking for more than 10 years.
The rapid movement of Sh1.001 million shortly after the new OMNI profile was created was also relevant to the court’s assessment of the bank’s fraud safeguards. According to the judgment, such activity should have triggered appropriate fraud controls.
Stanbic Ordered To Pay Sh511,000
The Small Claims Court ordered Stanbic Bank Kenya to refund Mr. Njoroge the Sh511,000 that remained unrecovered.
The amount represents the difference between the Sh1.001 million transferred by the fraudsters and the Sh490,000 that the bank later managed to recover.
The court also awarded interest at 12 percent per annum from the date the suit was filed.
The judgment therefore places the unrecovered loss on the bank after finding that its identity verification and digital onboarding safeguards were inadequate in the circumstances of the case.
