Fraudulent activities cost banks N6.3b, rising 1,125%
By Jeph Ajobaju, Chief Copy Editor
Fraudulent activities across mobile money transactions, computer and web, and Point of Sale (PoS) rose to 24,232 and cost banks N6.63 billion in the second quarter of the year ended June (Q2 2023), according to the Financial Institutions Training Centre (FITC).
The FITC disclosed in its latest report banks lost N6.03 billion to fraudulent loans and 26 bank appointments were terminated in Q2 2023.
It explained the total amount involved reached N12.33 billion in Q2 2023 during which it received 71 returns on cases of fraud and forgery from 24 banks.
“24 returns were received in April, while 23 returns were received in May, and 24 returns were received in June,” the FITC said.
A total 12,553 fraud cases were recorded in Q1 2023 but dropped to 11,679 in Q2 2023.
Mobile fraud, computer/web fraud, and P0S-related fraud are the three most prevalent types of fraud, and the trend persisted in Q2 2023.
“The data reveals a significant 276.98 per cent increase in the total amount involved in fraud cases during Q2 2023 compared to the previous quarter.
“The sum increased from N2.58bn to N9.75bn. Likewise, for amount lost there was a substantial increase of 1,125.03 per cent from N472m in Q1 2023 to N5.79bn in Q2 2023.”
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Increase in fraud cases perpetrated by bank staff
There was a 6.40 per cent decrease in outsider involvement in fraud cases, slashing from 12,351 in Q1 2023 to 11,561 in Q2 2023, the report said, per The PUNCH.
But staff involvement in fraud rose 22.22 per cent, from 72 cases in Q1 2023 to 88 in Q2 2023, according to the report.
“It was followed by the Computer/Web fraud category at N1.47bn (15.10 per cent). Mobile Fraud came next at N751m (7.7 per cent), and fraudulent withdrawals amounted to N663m (6.79 per cent).”
Automated teller machines (ATMs), online platforms such as web and mobile banking, bank branches, and PoS terminals were the channels for fraudulent activities in Q2 2023.
“The amount lost also saw a substantial rise, increasing from N472m in Q1 2023 to N5.79bn in Q2 2023, which corresponds to a 1125.03 per cent increase. This increase might be attributed to the fact that banks were liable for the losses incurred and had to make refunds to customers.”
The report urged banks to strengthen their security protocols and systems to prevent unauthorised access to customer accounts and sensitive information.
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