Discussion Paper No.173 of 2014 on Factors Determining Consumer Fraud Reporting in Kenya

Abstract

This study examines the factors determining consumer fraud reporting in Kenya. It presents cross-sectional evidence from data collected by the United Nations Office on Drugs and Crime and KIPPRA in 2009/2010. Descriptive results show that the most prevalent consumer fraud in Kenya is the proliferation of counterfeit goods. Using the logit model, the study finds that consumer fraud reporting is affected by the type of fraud, where proliferation of counterfeit goods is important, but negatively associated to reporting. This connotes that the more people are victimized, the more they fail to report to the police or other relevant authorities. This finding puts the fight against counterfeits into perspective, perhaps underpinning the important attention it needs to continue receiving from the government and other relevant institutions. More awareness by the Anti Counterfeit Agency (ACA) and other relevant stakeholders, improved ACA capacity, and better collaboration would enhance reporting and aid in curbing trade in counterfeits. In addition, perception of victims towards the police' ability to control crime positively impacts the reporting behaviour of consumer fraud. Poor perception towards the police impacts consumer fraud reporting more significantly, hence improving how citizens perceive the police is important in fighting consumer fraud. An improved perception would create more confidence in the security systems and people would be willing to file reports on economic crimes such as consumer fraud. Initiatives of reforming the police to improve service delivery should be encouraged, while embracing their capacity building on consumer crimes to enhance reporting and response.