How Nigerian Bank Customers Lose N1 Billion to Frauds Via ATM, PoS, Cards, Others in 3 Months 

How Nigerian Bank Customers Lose N1 Billion to Frauds Via ATM, PoS, Cards, Others in 3 Months 

Frauds and forgeries in Nigeria’s banking sector continue to plague customers, with significant losses incurred in the first quarter of 2023. The Nigerian Deposit Insurance Corporation (NDIC) expresses growing concerns over the surge in bank fraud cases. The Financial Institute Training Centre (FITC) recently published a report titled “Reports on Frauds and Forgeries in Nigerian Banks,” shedding light on the alarming situation.

Fraud and Forgeries in Q1 2023:

During the first quarter of 2023, close to N1 billion was lost to fraud and forgeries through various payment channels and instruments of transactions. These illegal activities targeted ATMs, cards, mobile banking apps, PoS terminals, cheques, and other channels.

Decrease in Fraud Cases:

Despite the substantial losses, there was some positive news as the total number of reported fraud cases across all transaction instruments declined. Cash, card, and cheque fraud cases saw significant reductions, indicating some progress in mitigating these illicit activities.

Money Lost through Card and Cash Fraud:

An analysis of the losses incurred from various instruments of fraud revealed intriguing patterns. Notably, card fraud witnessed a substantial decline of 90.21% from the previous quarter, while cash fraud increased by 35.89%.

Fraud via ATM, Web, Mobile, and PoS:

Examining the losses through different payment channels, a noteworthy increase in fraud via ATM and bank branch channels was observed. However, the web channel experienced a significant decline of 95.38%, while mobile and PoS fraud channels also witnessed decreases.

Bank Employees’ Involvement in Fraud:

The first quarter of 2023 showed a concerning trend of bank employees’ involvement in fraudulent activities, witnessing a significant increase of 89.47%. Banks took decisive action by terminating the employment of some involved employees.

Cyberattack on Globus Bank:

In a major setback for Globus Bank Limited, cybercriminals exploited a system glitch to withdraw N1.755 billion from customers’ accounts. Despite recovering a portion, the bank remains unable to reclaim a substantial amount transferred to other commercial bank accounts.

Conclusion: The unabated fraud and forgeries in Nigeria’s banking sector pose significant challenges to customer trust and the overall financial stability. While some progress has been made in reducing fraud cases and outsider involvement, the increasing participation of bank employees in such activities requires urgent attention and action from authorities and financial institutions. Preventive measures and improved cybersecurity protocols are crucial to safeguarding customers’ funds and maintaining the integrity of the banking system.