Inside Kenya’s Pay-Later Scam:How Rogue Insiders and Flashing Gangs Are Turning Dreams into Debts in Phone Market
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By Amos Mburu
On a busy afternoon in Nairobi’s Roysambu, Kevin (not his real name) scrolls through his sleek smartphone—a device he technically no longer owns.
“It cost me only two thousand shillings to make the debt disappear,” he says, glancing nervously around the café. His smile fades quickly, as if he knows this conversation is dangerous.
Kevin is one of thousands of Kenyans caught up in a growing web of fraud that has turned the once-celebrated “Lipa Pole Pole” dream into a multi-million-shilling nightmare.
What began as a revolutionary idea—helping ordinary Kenyans own high-end smartphones on credit—has spiraled into an elaborate scam involving rogue telecom employees, underground hackers, and insurance loopholes.
The promise was simple: pay a small deposit, take home a premium phone, and clear the balance in easy monthly installments.
For most customers, the system worked exactly as designed. But for others, it became a shortcut to free gadgets.
The publication interviews with insiders and customers reveal how the scam unfolds.
After making the first payment, some customers are approached by company employees who offer an irresistible deal: a one-time bribe to make their debt vanish.
“They told me for two thousand shillings, they could make the company forget I ever owed them,” Kevin says.
The mechanics are alarmingly simple. The insider disables the phone’s Mobile Device Management system—the very software meant to track payments and enforce compliance.
Once this lock is removed, the phone becomes untraceable, and the customer stops paying.
On paper, the company writes it off as bad debt and quietly files an insurance claim.
Everyone walks away happy—except honest customers, who unknowingly bear the cost through higher prices and stricter terms.
James Kamau, a former employee of a top credit-financing firm, admits that many companies rely heavily on MDM software to secure their devices.
But those safeguards crumble against Nairobi’s underground flashing market, where specialized tools can erase digital footprints in minutes.
“Once the IMEI lock is bypassed, that phone is gone forever,” says a Nairobi-based cyber forensic analyst. The real threat, he explains, is that the job becomes effortless when insiders grant hackers access to company systems.
On the streets, the black market for these devices thrives.
Luthuli Avenue, long known as Nairobi’s gadget hub, has become a hotspot for “clean phones.”
In closed Facebook and Telegram groups, sellers openly advertise unlocked devices at almost half the retail price. When pressed on their source, the replies are blunt: “Direct from a friend inside the company.” 
Authorities are beginning to take notice.
On May, 2025, the National Police Service issued a public warning after arresting two suspects in Eldoret during an impromptu raid.
Officers recovered 28 smartphones, many acquired on credit and illegally flashed.
The statement cautioned Kenyans against buying suspiciously cheap phones or engaging in schemes to evade payments.
“NPS warns the public against fraudulent activities such as flashing mobile phones purchased on credit,” the advisory read.
But experts fear that these isolated crackdowns barely scratch the surface of a syndicate that spans major towns and operates with insider support.
The financial damage is staggering.
Industry sources estimate losses of up to 50 million shillings every quarter, figures quietly buried in bad debt reports.
Insurance companies, unknowingly complicit, continue to absorb the losses, while law-abiding consumers are left to pay through inflated premiums and restrictive credit terms.
The government has yet to introduce strong consumer protection laws addressing this form of fraud.
Neither the Communications Authority nor the Insurance Regulatory Authority has launched formal investigations, leaving telecom companies to fend for themselves in a storm of digital deception.
“This is corporate theft enabled by technology and weak oversight,” says John Mwangi, a cybercrime expert. “Young people are learning that for two thousand shillings, they can cheat the system and even brag about it online.”
He warns that the scheme is normalizing fraud, creating a culture where beating the system is seen as a clever hustle rather than a crime.
Security analysts argue that until companies strengthen their systems, vet their staff, and collaborate with law enforcement, the dream of Lipa Pole Pole will remain hijacked—feeding a chain of greed, corruption, and complicity.
For now, it’s a goldmine not for telecom giants, but for scammers, insiders, and flashing gangs thriving in the shadows.
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