• Friday, June 14, 2024
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BusinessDay

Banks on scam alert to check identity theft

Nigerian, associates sentenced for $2.6M fraud in U.S

Commercial banks in Nigeria are stepping up efforts to tackle online scams targeted at their customers.

A recent report shows that between 2019 and 2023, Nigerians lost about N13 billion to financial crimes linked to the telecommunications industry.

The Nigerian Communications Commission (NCC) said recently that Nigerians were daily losing their hard-earned money to fraudsters, who were taking advantage of the vulnerabilities on their platforms to defraud them.

Umar Danbatta, executive vice chairman of NCC, said electronic fraud encompassed a wide range of malicious activities carried out via electronic means, including identity theft, phishing, hacking, and unauthorised access to personal and financial information, to defraud or take advantage of victims.

As such, he said e-fraud poses a significant threat to society, as it undermines the trust and confidence in digital platforms, hampers economic growth, and adversely impacts the lives of our citizens.

Various banks such as United Bank of Africa, Guaranty Trust Bank, Zenith Bank, First Bank have alerted their customers in different ways to fraud attacks, urging them to be vigilant and careful about how they disseminate important personal information.

UBA, in a recent update titled ‘𝐃𝐨𝐧’𝐭 𝐛𝐞 𝐚 𝐯𝐢𝐜𝐭𝐢𝐦 𝐨𝐟 𝐟𝐫𝐚𝐮𝐝’, told customers to “check for the Gold verified tick and followers count before you reply to a tweet from any fraudulent page claiming to be an affiliate of UBAGroup on Twitter.”

“Banking customers should be careful as they don’t have a WhatsApp department. Also not share your banking and card details with impersonators,” it said.

First Bank, in a tweet, said: “Stay Scam Smart! Please note: Do not disclose your PINs, passwords, OTPs, and other personal banking details to anyone as FirstBank will never ask for these details.”

Zenith Bank has urged its customers to visit any nearest branch or automated teller machines to update their personal information.

“This action will ensure access to your account and details of your financial information are not exposed to third parties,” it said. “Zenith Bank would never call, SMS, or e-mail requesting for your card details PIN, Token codes, Mobile/internet, Banking login details, or other account information. If you have received such a message, please do not respond.”

A 2020 report from the Federal Bureau of Investigation (FBI) listed Nigeria as the 16th country worst affected by cybercrime, and the rising number of scammers in the country is somewhat alarming.

This increase in Nigeria is often said to be a consequence of an erosion of societal values, arising from a growing negative influence of politicians who rise to wealth suddenly through appropriating state resources for private purposes.

“This get-rich-quick syndrome is a huge influence as young people try to make it at all costs, including through crime. But there are other drivers too such as poverty, unemployment, and inequality rates rising,” it said.

A Nigerian, Happy Chukwuma, 30, recently pleaded guilty to one count of wire fraud conspiracy. He was arrested and detained in the United Kingdom at the request of the United States in September 2022 and extradited to the United States in March 2023.

Between November 2015 and January 2019, Chukwuma and his co-conspirators participated in a variety of online fraud schemes, including “phishing” and romance scams. They exchanged victims’ personally identifiable information, including identification and financial documents, and engaged in financial transactions with that information.

A new report on Fraud and Forgeries in the Nigerian Banking System shows that fraudulent activities in Africa’s largest economy resulted in a loss of N472 million during the first quarter of 2023.

Read also: Nigeria’s banking sector loses ₦9.5 billion to electronic fraud

This amount reflects a significant decrease from the N3.18 billion reported in the fourth quarter of 2022.

According to the report, although there has been a decrease in the recorded cases of fraud, the prevailing incidents of fraudulent activities remain a significant concern.

“It is crucial for Nigerian banks to establish robust internal control systems that can effectively detect and prevent fraudulent activities,” it said. “Such systems can help to safeguard the interests of both the banks and their customers and promote trust in the banking sector.”

The Financial Services Information Sharing and Analysis Center (FS-ISAC) and Deloitte said in a recent survey that financial institutions spend six percent to 14 percent of the IT budget on cybersecurity, with an average of 10 percent of the IT budget being the norm.