Electronic financial fraud costs each person N35,000
By Jeph Ajobaju, Chief Copy Editor
Electronic financial fraud has cost Nigerians more than N25.5 billion in the past four years, which an non-governmental organisation, the Anti-Corruption Agencies of Nigeria (CAN), broke down to a loss of N35,000 per person per year.
CAN aggregated the loss to $18 billion when spread across financial crimes like bribery, internet fraud, and non-payment of taxes.
The Nigerian Communications Commission (NCC) has lamented efraud has become prevalent in the Information and Communications Technology (ICT) sector.
The NCC holds telecom operators partly responsible, as disclosed at the Second Quarter Industry Consumer Advisory Forum (ICAF) in Lagos, where the regulator warned them to improve on their security architecture or take the blame for the growing menace.
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Telecom operators reject blame for rising efraud
The NCC said once telcos improve their security architecture, unauthorised access will be effectively blocked, stressing Nigerians lose their hard-earned money to fraudsters who exploit network vulnerabilities, according to reporting by Vanguard.
However, the Association of Licensed Telecom Operators in Nigeria (ALTON) does not buy that argument, insisting telcos’ network architecture has nothing to do with efraud considering their huge investment in that area.
“The Nigerian telecom industry is one of the highly regulated sectors in the world,
ALTON Executive Secretary Gbolahan Awonuga argued in a panel discussion at the event.
“This is also why it is the toast of investors all over the world. So operating in this type of regulated sector almost imposes on you the obligation of getting everything right. And, to be fair, operators in Nigeria are living above board in their responsibilities.
“I do not agree that the problem of efraud is as a result of operators’ poor infrastructure. The operators have upgraded, and consistently do upgrade, their infrastructure to the extent it can cope with threats.”
NCC Executive Vice Chairman Umar Danbatta narrated a personal experience of having lost $5,000 to cyber criminals and insisted telcom networks need be kept safe for all.
“Telecom operators must upgrade and equip their networks with tools that will make them robust and secure from criminal attacks because of consumers. An unsecured network puts the personal data of Nigerians at risk,” he said.
“This was why we came up with the idea of type approval equipment policy, so that equipment don’t undermine the security and safety of Nigerians.”
Danbatta described efraud as a social vice that encompasses a wide range of malicious activities carried out via electronic means, including identity theft, phishing, hacking, and unauthorised access to personal and financial information, with the intention to defraud or take advantage of victims.
He said these criminal activities cause significant financial losses and also erode consumer trust in the digital ecosystem.
Rapid telecom expansion opens avenues for cybercriminals
NCC Consumer Affairs Bureau Director Alkasim Umar echoed the views of Danbatta that the rapid expansion of telecom has opened new avenues for criminals to exploit individuals through various forms of electronic fraud.
His words: “We have witnessed a surge in digital transactions, making lives more convenient and efficient. But that also come with negative developments which should be guarded against.
“Some reports have revealed that Nigerians have lost about N12.5 billion to financial crimes linked to the telecommunications industry in the past four years; this needs to be stopped.
“The Centtr for Strategic and International Studies (CSIS) estimated that $600 billion is lost to cybercrime each year, an increase from a 2014 study that put global losses at about $445 billion.
“eFraud poses a significant threat to society; it undermines the trust and confidence in our digital platforms, hampers economic growth, and adversely impacts the lives of our citizens.
“As the regulatory authority responsible for overseeing the telecommunications industry, the NCC recognises its duty to safeguard the interests of consumers and protect the integrity of the digital ecosystem. That is why we are having these conversations today.”
