By The Weekly Vision Business Desk
The High Court in Machakos has upheld a lower court’s decision finding Diamond Trust Bank Kenya Limited (DTB) liable for negligence after more than KSh4.4 million was fraudulently withdrawn from a customer’s account following a SIM-swap fraud.
In a judgment delivered on 18 June 2026, Justice Asenath Ongeri dismissed DTB’s appeal against the magistrate’s court ruling. The judge also dismissed a cross-appeal filed by Safaricom PLC, finding that the mobile operator’s role in facilitating the unauthorised SIM swap was a direct and proximate cause of the customer’s loss.
The case arose from events in February 2022 involving Ms Mercy Wairimu Kariuki, whose Safaricom line was allegedly swapped without her authorisation on 6 February 2022.
According to court records, Ms Kariuki immediately reported the incident to Safaricom after losing access to her line. She was informed that the SIM swap had been carried out through an M-Pesa agent and was advised to visit a Safaricom shop. Her line was restored the following day.
However, at around 5.23 a.m. on 8 February 2022, Ms Kariuki began receiving transaction alerts from DTB indicating multiple withdrawals from her bank account that she had not authorised. By the end of the incident, KSh4,418,601 had allegedly been transferred from her account through the bank’s mobile banking platform and Pesalink.
Ms Kariuki argued that DTB had acted negligently and breached its duty of care by processing a series of highly unusual transactions without carrying out additional verification. She told the court that the transfers involved substantial sums moved in quick succession to multiple unrelated bank accounts and mobile phone numbers, despite her never sharing her Personal Identification Number (PIN) with anyone.
DTB denied liability, maintaining that all the disputed transactions had been authorised through the correct use of Ms Kariuki’s mobile banking credentials and PIN. The bank argued that, under its account terms and conditions, successful PIN authentication was sufficient proof of identity and did not require further verification.
The bank also contended that the transactions did not exceed its daily transfer limit of KSh2 million, as they were spread over three separate days. It further argued that responsibility lay with Safaricom because the alleged compromise originated from the SIM swap. DTB additionally challenged the court’s jurisdiction, arguing that the dispute should have been pursued under the Data Protection Act or the Kenya Information and Communications Act, rather than through an ordinary civil claim.
The trial court, presided over by Senior Resident Magistrate R.W. Gitau, rejected DTB’s arguments, finding that the bank had ignored obvious warning signs. The magistrate held that the rapid movement of large amounts of money to multiple unrelated recipients should have prompted the bank to carry out additional verification before processing the transactions.
The magistrate found both DTB and Safaricom liable. While Safaricom was held primarily responsible for the unauthorised SIM swap, DTB was found negligent for failing to detect and stop the suspicious transactions. Judgment was entered in favour of Ms Kariuki, with DTB ordered to pay KSh1,788,601, together with costs and interest. The court also awarded damages for negligence and breach of confidentiality.
Unhappy with the decision, DTB appealed to the High Court, arguing that the magistrate had erred in finding the bank liable despite its compliance with its contractual terms and banking procedures. The bank also argued that the trial court had failed to consider accepted banking and accounting principles applicable to mobile banking transactions carried out on non-business days.
Safaricom, meanwhile, filed a cross-appeal challenging the finding that it bore responsibility for the SIM swap. Justice Ongeri rejected both challenges. The judge found that DTB had failed to demonstrate any error in the magistrate’s findings and held that the evidence supported the conclusion that the bank had breached its duty of care by failing to act on suspicious transaction patterns.
The court also dismissed Safaricom’s cross-appeal, finding that the unauthorised SIM swap was a direct and proximate cause of the fraudulent withdrawals. The High Court therefore upheld the judgment of the Chief Magistrate’s Court at Mavoko in Civil Suit No. E182 of 2022, dismissing both the appeal and the cross-appeal, with costs awarded to Ms Kariuki.
The parties were represented by Mr Mulyungi, holding brief for Mr Ludenyo for DTB; Mr Ongwen for Safaricom PLC; and Mr Mwangi for Ms Kariuki.
This report is based on a certified copy of the High Court judgment in HCCA E121 of 2024.
