Fraud Cases hit major payment channels across Nigerian Banks

Major payment channels in Nigeria were hit with the high reported fraud incidences in 2018, data obtained by Nairametrics from Central Bank of Nigeria (CBN) revealed.

The apex bank’s Financial Stability Report disclosed that the payment channels hard-hit include Automated Teller Machines (ATM), Point of Sales (POS) and Mobile.  

Details provided show that ATM recorded the highest incidences of fraud in Nigeria with 34.87% Fraud Interest Index in the period under review. Also, the Mobile payment channel ranks the second with the highest fraud incidences with 28.21% Fraud Interest Index, while POS recorded 19.55% Fraud Incidences in 2018.  

Fraud incidences recorded across other payment channels include “across the counter” (8.52%), Cheques (1.87%), E-commerce (0.14%) and Internet Banking (0.43%).  

Payment Channels’ Fraud: Earlier report published on Nairametrics showed that cases of fraud and forgeries recorded by Deposit Money Banks (DMBs) rose to 25,029 at the end of December 2018, from 20,774 cases at the end of June 2018. In terms of the amount involved, the sum of N18.94 billion was recorded as cases of fraud and forgeries in 2018 full year, with actual losses estimated at N2.21 billion. 

Also, according to an earlier report released by the Nigerian Electronic Fraud Forum (NeFF), electronic bank fraud cases over the last three years (2016 – 2018) rose to N5.571 billion. According to the NeFF report for 2018, while the value of fraud perpetrated across counter has been on the decline over the last three years, the ones done via Automated Teller Machines and mobile devises has been on the increase. 

Cloned ATM Card Alerts: The CBN 2018 report further shows that there is rising trend in payment channel fraud in the World. While providing details on the global trend, CBN noted that the U.S Bureau of Investigation had issued a warning to banks on a new type of fraud known as the ATM Fraud or ATM Cloned Card fraud”.  

Basically, the ATM cloned Card fraud involves hackers accessing bank systems or payment card processors and altering data in order to withdraw large sums of cash within a short period. 

By the end of December 2018, various cyber-attacks had been carried out on high profile entities, including the Central Bank of Bahamas, Marriot Hotels, Google plus, Arik Air, British Airways and UK NHIS, leading to the loss of customers’ private information, revealing the vulnerability of all classes of organizations 

In order to tackle this trend in Nigeria, CBN noted that bank customers are continually sensitized on safe banking practices while banks are also encouraged to implement strong authentication controls and carry out comprehensive infrastructure risk assessments. 



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