KENYA Law and Practice Contributed by: Sammy Ndolo, Njeri Wagacha, Brian Muchiri and Sara Ndei, Cliffe Dekker Hofmeyr incorporating Kieti Law LLP
ately halt their operations; • imposing fines – regulators have the power to impose financial penalties on persons under - taking regulated activity without appropriate licensing; • criminal prosecutions – regulators may work with law enforcement to pursue criminal charges against persons undertaking regulat - ed activity without appropriate licensing; and • public warnings – regulators often issue pub - lic statements and warnings to inform con - sumers about unlicensed entities or fraudu - In Kenya, a FinTech service provider may be held responsible for customer losses in various circumstances, primarily if the loss or damage arises from fraudulent actions, regulatory viola - tions, breach of contract, or inadequate security measures by the provider. Specifically, a provider can be liable: lent schemes they have identified. 12.3 Responsibility for Losses • If it engages in fraud, gross negligence, or intentional misconduct, leading directly to financial harm or loss to customers.
• If it breaches contractual obligations, particu - larly when customer agreements or consumer protection laws have been violated. • For failure to comply with regulatory obliga - tions, including licensing requirements, data protection standards, and cybersecurity obligations. In such cases, customers may seek remedies, including compensation for financial losses, refunds, or other legal sanctions. Regulators such as the CBK, Competition Authority of Ken - ya, and Office of the Data Protection Commis - sioner can impose fines, regulatory sanctions, or require customer compensation. Customers affected by fraudulent or negligent activities by FinTech providers also have the option to file complaints with regulators or seek legal redress through Kenyan courts.
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