• Saturday, July 13, 2024
businessday logo

BusinessDay

Electronic fraud in Nigeria peaks at N2.9bn, raises calls for review of cybercrime law

At N2.19 billion just within 12 months, Nigeria witnessed elevated levels of losses to Electronic fraud in 2016, a situation which now raises calls for a review of the 2015  cybercrime Act which stakeholders, on Tuesday said has been difficult to enforce due to lapses in that document.
According to figures seen in the 2016 annual report of the Nigeria Electronic Fraud Forum (NeFF), reported fraud cases rose 82 percent from 2015 and over 1,200 percent in 2014 on the back of increasing usage of new payment platforms.
Deposit Money Banks reported 19,531 fraud cases as against 10,743 in 2015.
The Other Financial Institutions (OFIs) reported 88 fraud cases, though 38 percent reduction in reported fraud volume when compared with 2015 numbers. While attempted fraud value settled at N50.53 million, actual loss value amounted to N17.42 million.
A breakdown indicate that N464.5 million was lost through the Automated Teller Machines (ATMs) within the year; N243.3 million through Point of Sale (POS); N235.1 million through mobile; N320.6 million through Internet banking; N511.1 million across the counter; N132.2 million through eCommerce; N83.7 million through the web; N10.1 million through the kiosk; and N4.5 through cheques.
But Comparing the attempted fraud as against actual loss, the industry was able to salvage 49.7 percent of the total amount attempted by these fraudsters within the year.
Actual losses due to fraud cases reduced by just 2.7 percent in 2016, when compared with the losses witnessed in the previous year.
“The story behind the figures clearly shows that as we move further down the digital path in payments, fraud attempts are bound to increase and the test of our strength as an industry will be how effective the collaboration among all stakeholders in warding off this imminent threat to the payments is, not only domestically but also internationally,” said Dipo Fatokun, Banking and payments system department of the Central Bank of Nigeria and Chairman, NeFF.
As indicated in the NeFF report, 2016 witnessed a significant transaction increase across all payment channels in both volume and value in spite of the economic recession in Nigeria.
In contrast with 2015, there was a 71.43 percent spike in volume of transactions processed through the Nigeria Central Switch (NCS). Volume of processed transactions amounted to 278, 744, 529, while the value was over N64 trillion.
Nigeria Central Switch provides interoperability and flexibility of consummating transactions between the various institutions within the country’s financial space.
Speaking at the maiden edition of the stakeholders workshop on cybercrime where the NeFF report was launched, CBN governor, Godwin Emefiele said the regulator is constantly confronted with issues raised by operators who sit as the “first line of defenders” against cyber attacks on the systems, networks and infrastructures through which financial services are carried out in the country.
According to him, the incentive for network breach or cyber-attack in the financial sector had become more compelling for obvious reasons, than other sectors.
“This is why the protection of information infrastructure utilized in the delivery of financial services is considered critical all over the world, and it was because of the importance of securing infrastructure such as those of the financial sector, and protecting the underlying services from cyber-attacks that the Cybercrime (Prohibition and Prevention) Act was enacted in 2015,” the governor stated in a keynote speech just before he launched the NeFF report.
He noted that it is now about two years into the commencement of the Act, and that it was necessary to conduct a holistic review of its implementation, hence the theme of this workshop: “Tackling Enforcement Challenges under the Cybercrime Act.”
Bayo Adelabu, CBN Deputy Governor, Operations who also spoke at the event said
the passing into law of an act on Cybercrime Prohibition and Prevention in May 2015 brought some comfort and marked the beginning of an era in the regulation of all cyber activities in Nigeria.
But while the country now has a legal framework for Cybercrime and Cybersecurity, the Nigeria electronic Fraud Forum in various reviews of the act have received feedbacks which question the content and structure of the law and point to inconsistencies, when weighed against certain core technology laws and cybercrime principles.
 “It is the opinion of most stakeholders engaged by NeFF, that these issues have created intractable enforcement challenges for those mandated to implement the law,” Adelabu stated.
The two days workshop which gathered almost all crime related enforcement agencies in the country therefore focused on careful examination of the extent to which the obligations placed by the Act are fulfilled, and the general assessment of any challenges experienced in compliance with the provisions of the Act.
Basil Udotai, Managing Partner who critiqued the law, speaking on the theme, “Enforcement challenges inherent in the cybercrime Act 201” pointed out different lapses in the law which, according to him makes it not practicable and should be reviewed.
Onyinye Nwachukwu, Abuja