Lagos residents groan as POS fraud soars

•N110,000 stolen from my account within hours —Victim •Why armed robbers prefer android POS machine —Operator •How to reverse loss —CBN

For just using a POS dealership point, my ATM information was extracted and used to order products. Indicated below are the details of the transaction….. Please, Nigerians, help me raise your voices for (name of affected online platform for services and payment withheld) to declare the recipient of this purchased item.”

That was Mr Ben Olakunle lamenting on his Twitter handle in April 2022. He was a victim of what has come to be known as POS (Point of Sales) fraud which available data shows is now on the increase in Lagos State, the commercial nerve centre of the country.

Olukunle is not alone. As the POS business spreads across the state, with more residents embracing the ubiquitous centres operating them, so is the vulnerability of the service getting increasingly exploited by criminals to cause those patronising the operators more pains and tears.

The rise in POS terminals has brought about easier and quicker payment services to millions of customers, even in rural communities. But it has also created a challenge for customers who have to watch over their shoulders, considering how fraudsters now take advantage of widespread use of their bank details to steal from them.

In the middle of this worrying scenario is the argument of who is taking advantage of whom? As discovered by Saturday Tribune, nobody seems exempted, as operators have also claimed to be victims of fraudulent activities of some customers, though the latter are the ones regularly heard in the public spaces’


Counting losses

To augment her monthly salary, a private school teacher in Lagos, Idowu (surname withheld), sought an alternative source of income in PoS business which, according to her, requires a little start-up capital but has a high profit margin.

The experience was defining and rewarding for her until she became a fraud victim.

She narrated her ordeal to Saturday Tribune: “Beyond being a merchant, I have fallen victim to POS fraud. I opened for business on that fateful day and a female customer with a man I suspected to be her husband walked in for some transactions.

They were neatly dressed and there was nothing suspicious about them. The woman spoke to me in a humble and respectful manner, after which she brought out her Automated Teller Machine (ATM) card and gave it to me to withdraw the sum of N60,000. I inserted the card into my POS machine but it was unable to process the transaction.

“Having tried it twice, I returned her ATM card to her with the excuse that the network was down; that perhaps it was her ATM card that had issues. Her countenance instantly changed and she began to plead with me to keep trying because of the urgency of what she needed the fund for. I told her there was nothing I could do unless the network was restored.

“After I was done with the last customer, the woman asked if it would be possible for her to transfer the sum to my account and I would pay her the amount. I didn’t object and she made the transfer. After a few minutes, she called my attention and said that she had completed a transfer of N60,000 to my account. I told her I hadn’t got any alert and she showed the transaction details to me on her phone and I gave her the money.

“She paid N1,200 as transaction fee on the sum, dropped her phone number with me to call her if I had any issue. I was glad and I continued with the business of the day. Hours later, no alert came into my phone.

“It was late and I began to worry but I sought comfort in the phone number she gave to me and the poor banking network. I remained calm until around 8.00 p.m. when I called my bank’s customer care department. This was when I was told there were no transactions except for the N2,000 I transferred shortly after her own which the bank official said was pending.

“I could not cry. I called the phone number she gave to me and she said I shouldn’t bother to call her line as she had gone back to Ondo State where she came from. And that was the end of the story.”


Pains, tears

Another victim of POS fraud, Omotayo, wept when her bank account was hacked and she lost all her money to fraudsters. Narrating her ordeal to Saturday Tribune, she said: “I had used my ATM card many times during the week of that incident. I couldn’t identify the particular point where the scam happened.

“I visited a POS point to withdraw N5,000 and after the withdrawal, I kept my ATM card in the usual spot that is known only to me. When I received debit alerts from my bank, I felt it was a mistake but when I checked my account, N10,000 had been deducted out of my balance of N111,000.

“This happened on a Saturday, so I couldn’t visit the bank to lodge a complaint. A few minutes later, I received another debit alert of N10,000 from my bank. ‘What is happening?’ I asked myself. Minutes later, I got another debit alert of N10,000. It continued until my account balance was N11,000.

“This time, with tears running down my cheeks, I hurried to a nearby POS point to withdraw the remaining N11,000 before I would receive another debit alert. But before I got to a POS point, I had received another debit alert of N10,000, leaving my account balance at N1,000. I wept. I cursed the scammers but then I had lost N110,000 to POS fraudsters.”

Another POS operator simply identified as Daddy Janet has been in the business from its inception. He runs the business in a considerably safe environment, as his office along a major street is accommodating enough to allow customers who want to take a seat and settle down, before transacting businesses relating to deposits, sending money, or settling bills.

Daddy Janet is one of the few in the POS business who believe that due process must be followed. When you transact business with him, he would ensure you sign a receipt which he would keep, then hand over to you the unsigned one as your own copy. This approach of his is not very common with many of the operators, as the widespread practice is to just issue customers receipts and they go their way.

Despite the carefree attitude of other operators, he has kept to his ways, explaining that he was keeping faith with the procedure prescribed by an old generation bank which registered his outfit. He also disclosed that the bank sent officials to carry out inspection before he was certified and issued a certificate to commence operations.

Speaking with Saturday Tribune, Mr Ade Ajayi, who expressed concern about the growing number of POS points in Lagos, observed that some people, including himself, were always careful about transacting businesses through them, especially when using ATM cards.

Ajayi said: “Some Nigerians don’t like to take their ATM cards to POS operators for withdrawal because there are allegations that some of them are agents of fraudulent people.

“There is the impression that they can easily copy the number written on the ATM card and with that, they can hack into one’s account and withdraw money from it without difficulty.

“As a result of this, some people prefer to transfer money into the account of the POS operators, or when compelled to withdraw with an ATM card, they enquire about a credible POS operator.”

A woman who did not want her name in print said there was the need to be careful with POS operators, recalling that one of her friends lost N75,000 about two months ago.

According to her, the incident happened in the Akowonjo area of Lagos and by the time her friend went back to the spot, the operator had moved.

“By the time she went back to check on the particular spot, the POS operator had packed away,” she said.


‘They are demonising us’

But for the advent of the POS business, Margaret, a POS operator in Aboru, in Oke Odo Local Council Development Area of Lagos State, would still be job-hunting.

The business, which she started two years ago, according to her, has gone a long way in guaranteeing her financial independence. She no longer relies on uncles and other family members to meet her basic needs. This is why her story is different.

Interestingly, she has even veered into other businesses, with the POS services still serving as the core business.

While she agrees that the technology may have its downside, she takes exception to the claim that money is being lost by clients at POS centres without any hope of a refund.

She said: “Those saying that are simply ignorant and are only trying to demonise the business. There may be issues sometimes but what we do is that as registered POS operators, we lodge our complaints to our banks with the details of the contentious transaction and after such claims are verified and found to be true, the money is refunded and we get back to the customers. It can only be the other way round only if the POS operator is fraudulent. And if you are fraudulent in this business, it is only a matter of time before you shut down.”

Mr Emmanuel Adegoke, a frequent user of the services, described the technology as the greatest thing to happen to Nigeria’s financial landscape; since it eases the huge burden associated with going into the banking halls.

“I can’t remember the last time I went into a banking hall to do transaction. I use a nearby POS outlet for my financial transactions. Although it is at a cost, I find it more convenient than spending the whole day in the bank,” the father of three stated.

Adegoke, popularly called Baba Johnnie in his area, also had a different opinion on the claim that funds are being lost to POS fraud.

He said: “I have had issues with using the service before but none of the issues resulted in loss of my money. I remember a time when I gave the bank details of an operator to a client of mine to send money to and this was done. But when the client was about sending money to me months later, he just sent to that account directly, thinking it was my account. After I had expected the money for more than one day, and with the client saying he had sent it, we later discovered the money was actually sent to the POS operator and the operator owned up and gave me the money,” he stated.

Another operator, Temilade, told Saturday Tribune that certain e-crimes are not easily traceable because of how the operation of POS is configured.

According to her, there are two kinds of POS machines, namely, traditional and android. According to her, the traditional POS prints receipt at the end of every transaction, successful or not, but the android POS only prints out successful transactions, which can easily be manipulated.

She disclosed that the android version is the kind being used by armed robbers because it gives no details of the transactions carried out on it. She also said it is easy to get away with financial crimes committed with the use of POS machine because the SIM that is attached to the POS account with which the agent receives bank alert for every transaction is different from the SIM that is used to operate the machine.

She said: “A POS machine fraud is traceable only if the SIM in the machine is the same as the SIM with which the agent receives transaction alert from their bank but this is not the case. A POS agent can register with one telecommunications service provider’s SIM and operate the POS machine with another’s. This is one of the reasons POS fraud cannot be easily traced.”


POS robbers can be tracked –Banker

While many bank officials refused to speak on record on the controversial subject, a top official of a new generation bank, in an interview with Saturday Tribune, explained that POS machines are issued by merchants, companies or banks, adding that a fraudster or robber could be traced to the company’s name with which the POS is registered.

The banker said: “For the POS registered with banks, the robbers can be traced through the account number it was registered with. For those obtained from or registered with the bank, it takes two weeks from the date a complaint is lodged for the banks to conclude investigation.

“The bank would provide the name of the owner of that particular POS or the name of the company that owns it. But that is where the bank’s duty stops. It can only provide this information to the customer; it is now left for the victim to take the information to the police for arrest and prosecution.

“If it is a bank-to-bank transfer that the fraudster has made, then the bank would block the fraudulent account and put the person on a watch list or blacklist the customer’s Bank Verification Number (BVN). The problem is that most victims do not bother to report.”

The source mentioned another kind of fraud where the fraudster uses an online application downloaded from the internet to defraud POS operators.


CBN reacts

When contacted, the spokesperson of the Central Bank of Nigeria (CBN), Mr Osita Nwanisobi, said the position of the apex bank on consumer protection remained the same.

He referred to the information on the bank’s website on how to lodge a complaint with the CBN.

The apex bank advises customers to allow deposit money banks to resolve their complaints within two weeks.

“If after lodging your complaint your bank still fails to engage you and resolve the complaint within two weeks, as provided for in the ATM Help Desk Circular, you have the right to escalate your complaint to the Consumer Protection Department (CPD) of the CBN.

“You can only direct your complaints to CPD upon the failure of your bank/financial institution to resolve your complaint within the two weeks timeline given by the CBN,” the apex bank said.

The apex financial regulator said customers can contact the CPD by sending an email to, or call +234 7002255226.

Customers can also choose to write a letter addressed to the director, Consumer Protection Department, Central Business District, Abuja.

The CBN adds: “Your letter of complaint should be addressed to the Director, Consumer Protection Department. You can submit your letter at the CBN Head Office OR at any of the Central Bank of Nigeria branches of nationwide.

“Your complaint should be clear and concise to avoid ambiguity. The complaint letter (petition) should contain amongst other things the following: name, address, contact phone number and e-mail of the complainant; name of your financial institution; personal banking details (Do not include PIN and passwords, please;); history/date of the transaction in dispute; amount claimed (if any); attach relevant documents to support your claim and; evidence to show that you have first lodged the complaint at your bank.

“You can make your further inquiries and obtain additional information on the Complaints Handling Process of the Central Bank of Nigeria from the complaints unit of your bank/financial institution or from CBN offices nationwide.”


Police speak

Spokesman of the state police command, Mr Benjamin Hundeyin, described POS fraud as part of bigger crimes.

When asked about the statistics of POS fraud-related convictions secured by the command, Hundeyin said: “I don’t have details of people convicted over POS fraud. I don’t have that statistics. We have cases that have POS usage along the line.

“There are crimes like kidnapping committed that POS are used to collect ransom. Even police officers that extort use POS. So, we have several cases that POS comes in, but the focus has not been POS. We don’t have a category that strictly deals with POS fraud. POS fraud is a part of bigger crimes which are supposed to be focused on.”


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