In Kenya, intentionally withholding or spending mobile funds (like M-Pesa or Airtel Money) sent to you by mistake is a criminal offence that can result in a jail term of up to 2 years, a fine of up to KSh 200,000, or both under Section 35 of the Computer Misuse and Cybercrimes Act, 2018.
If the prosecution pushes the charges under more severe legislation, such as the Penal Code (for theft) or the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA), the penalties scale significantly higher:
Theft Charges (Penal Code, Section 268): Courts frequently rule that spending mistakenly received cash amounts to “theft by finding.” This carries prison sentences typically ranging from 3 months to several years depending on the magistrate’s discretion.
Money Laundering Charges (POCAMLA): In high-profile or bank-linked fraud escalations, individuals found intentionally acquiring or using property they know is an erroneous credit can face up to 14 years in prison, a fine of up to KSh 5 million, or both.
Precedent and Recent Court Rulings
The Kakamega Farmers Case (September 2026): Two farmers faced a potential 14-year jail term at the Milimani Law Courts for spending KSh 33,952 erroneously transferred to their M-Pesa accounts from a bank account. Even after pleading for leniency and refunding the cash, they faced heavy prosecution to serve as a warning to other mobile subscribers.
The Embu Case: A woman was sentenced to 6 months in prison after she withdrew and spent KSh 27,140 sent to her by mistake, switched off her phone, and failed to raise the court-mandated KSh 40,000 fine.
The Nairobi Case: A man was handed a 3-month prison sentence (or a KSh 20,000 fine) for spending KSh 16,463 received in error.
Landmark Ruling on Financial Institution Liability
In July 2026, the High Court issued a landmark ruling strengthening the recovery process.
The court held that while banks/telcos cannot unilaterally reverse a transaction without the recipient’s consent, financial institutions are legally required to act promptly to preserve the disputed funds once notified.
If they fail to freeze the funds quickly, allowing the wrong recipient to withdraw them, the bank can be held liable for negligence.
