THE Nigeria Electronic Fraud Forum (NeFF) has disclosed that monies stolen from bank customers’ accounts are difficult to trace because in recent times, scammers have developed a method to redirect funds through betting platforms and wallet accounts, resulting in minimal success rates for recovering those funds through these avenues due to insufficient identifications.
This, according to the Director of Payment Systems Management of the Central Bank of Nigeria (CBN), Musa Jimoh, who doubles as the chairman of NeFF, has resulted to loss of N9.5 billion in accumulated electronic fraud (e-fraud) within the banking sector and payment systems network so far in 2023.
Jimoh, speaking at the third quarter (Q3) 2023 general meeting of NeFF in Lagos, where stakeholders converged to discuss ‘New strategies for combating e-fraud in a cashless environment,’ called for enhanced collaboration within the payment systems’ ecosystem to curtail the rise in e-fraud.
According to him, people keep money in electronic form, giving rise to the need to continue conversation around new strategies by which e-fraud can be combatted.
He said, “If we don’t combat the cyber criminals, they will take us down and disrupt the entire system. So, we all need to work together to see how we can make life extremely difficult for cybercriminals.
“We need to look at new ways, new techniques and more efficient manners by which we can improve and guard against the banking and payment infrastructure and educate ourselves on how we can safeguard our bank credentials or tokens and all the information that the banks have provided to us to safeguard.
“The more information we have about what they are doing, the more we are protected.
“The objective is to have zero fraud, but you know, this is a gradual process because as you are building techniques, they are also exploiting other areas. As more people come into the financial sector, as more transactions happen, people are vulnerable and so we need enlightenment and education. We will continue to push it, which is why it is going to be a very long journey.”
“But I know that with the kind of enlightenment and the push by the Bankers’ Committee and other stakeholders, a lot of Nigerians will be well educated to know that they have to keep all the accounting details very secret and therefore, we anticipate that the incidence of fraud will taper down almost to zero.”
Giving insights into e-fraud data in 2023, the Managing Director of Nigeria Inter-Bank Settlement System (NIBSS), Premier Oiwoh, noted that the industry in 2023 recorded its highest actual loss value of N2.7 billion in January while June 2023 had the lowest value of over N800 million.
He added that the highest fraud count in the last six months was recorded in May 2023 with 11,716 records while the lowest count was in June 2023 with 6,240.
Represented by the Chief Risk Officer, NIBBS, Temidayo Adekanye, he said, “Recently, we had the cashless policies from CBN, which was incurring a dramatic increase in the volume of transactions in the industry. This invariably has the impact on the volume of fraud in the industry itself.
“Now, the increase and efficiency have also meant that fraud has dramatically increased across the industry. For Q1 2023, the total fraud reported through the industry forum portal was at N5.1 billion.
“What we see most is the fact that the primary channels are the betting platforms. Once the money hits the betting platform or a wallet account or in some cases, POS agents, once it is cashed out, it is a black hole. There is no way you can recover that money. We are talking about potentially five percent recovery rates across the industry. So, we all have to identify those betting and wallets accounts, POS agents, cryptocurrency accounts and in some cases purchases.”
For fraud trends over the last five years, there was about N3 billion fraud cases in 2019 and in 2023, “we are looking at about N9.5 billion to date.”
He added that fraud losses have increased dramatically over the last five years.
The highpoint of the occasion was the unveiling of NeFF official website to aid collaboration and information sharing among stakeholders.
The CBN Director was accompanied by the Managing Director Fidelity Bank, Nneka Onyeali-Ikpe and other stakeholders.
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