Nigerian Banks Customers Lose N1 Billion to Frauds Via ATM, PoS, Cards, Others in 3 Months

• Frauds and forgeries in Nigeria’s banking sector have continued unabated with customers losing their monies
• In the first three months of 2023, close to a billion naira was lost through different types of financial scams
• These illicit activities were perpetrated via ATMs, cards, mobile banking apps, PoS terminals, cheques and other channels

Close to N1 billion was lost to fraud and forgeries through various payment channels and instruments of transactions in the first quarter of 2023.

This follows a growing apprehension expressed by the Nigerian Deposit Insurance Corporation (NDIC), over the surge in bank fraud cases.

This was disclosed in a report titled, “Reports on Frauds and Forgeries in Nigerian Banks”, recently published by the Financial Institute Training Centre (FITC).

About N472 million was lost to fraud through various payment channels including web, ATM, bank branch, mobile banking, and PoS (Point of Sale) terminals in Q1 of 2023, a 12.3% decrease from N3.6 billion recorded in the previous quarter (Q4 of 2022).

N459 billion was also lost to fraud through various instruments of transaction which include cards, cheques, and cash. This marked a significant 85.40% decrease from N3.1 billion recorded in Q4 of 2022.

Money lost through card and cash fraud

Upon analyzing the losses incurred from various instruments of fraud in the first quarter of 2023, a striking pattern emerges.

Notably, the amount lost through card fraud witnessed a substantial decline of 90.21%, plummeting from N3.03 billion in Q4 2022 to N296 million in Q1 2023.

Conversely, an increase of 35.89% was observed in cash fraud, with losses rising from N120 million in the previous quarter to N163 million in Q1 2023.

Money lost through ATM, web, Mobile and PoS

The analysis of the amount lost through different payment channels reveals intriguing trends. Notably, there was a significant increase in losses due to fraud in the ATM channel and Bank Branch channels.

Losses via the ATM channel surged from N949 million to N1.6 billion, marking a substantial 68.51% rise. Likewise, fraud-related losses in bank branches rose by 43.86%, reaching N172.56 million from the previous figure of N119.95 million.

Contrastingly, the Web channel experienced a remarkable decline of 95.38%, with losses reduced to N130.8 million from N2.83 billion in the previous quarter.

Additionally, both Mobile and POS fraud channels witnessed decreases of 15.76% and 43.86%, respectively.

Cash, cash and cheque fraud cases declined

Across the board, a decline was observed in the number of reported fraud cases across all transaction instruments.

Cash fraud experienced a decrease of 7.28%, with the number of cases decreasing from 151 to 140.

Similarly, card fraud saw a significant reduction of 15.12%, dropping from 11,566 cases to 9,817 cases.

Likewise, cheque fraud recorded a substantial decline of 60.87%, with reported cases decreasing from 29 to just 9.

Bank employees’ involvement in fraud

In the first quarter of 2023, a striking trend emerged as the participation of bank employees in fraudulent activities witnessed a significant increase of 89.47%.

The number of staff involved surged from 38 individuals to 72, raising serious concerns within the financial sector.

During the first quarter of 2023, banks took decisive action against fraudulent activities by terminating the employment of fifteen (15) employees involved in such practices.

This figure indicates a 25% decrease from the previous quarter, where twelve (12) bank staff had their employment terminated for similar reasons.

On a contrasting note, there was an encouraging 8.08% decrease in outsider involvement in fraudulent activities. The figure declined from 13,436 outsiders reported in the previous quarter to 12,351 in Q1 2023.

Globus Bank loses customers’ N1.7bn to hackers

Meanwhile, Globus Bank Limited, a prominent Nigerian financial institution, faced a significant setback when cybercriminals successfully withdrew N1.755 billion from customers’ accounts due to a system glitch.

Legit.ng reported that the unauthorized transfers were orchestrated by hackers who exploited a technical vulnerability in the bank’s USSD channel.

Despite managing to recover N817,998,969.85 from the fraudsters’ accounts, the bank remains unable to reclaim the remaining N962,019,843.35, which was transferred to eight different commercial bank accounts within the country.

Source: Legit.ng