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Exclusives

How fraudsters fleece elderly Nigerians of their bank deposits

Fraudsters in connivance with some bankers are targeting mostly elderly customers to fleece them of their bank deposits.

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Protecting your money from fraudsters, Financial crisis is imminent in Nigeria -Dr. Segun Aina, Yahoo Yahoo

Mary Adegoke, 70, is a retired teacher and a depositor with one of the Nigerian Tier-1 banks. The mother of five got a rude shock on Friday, January 8, 2021, when she got a call from a stranger, who claimed to be her new account officer, requesting a One Time Password (OTP) that was sent to her phone a few minutes earlier.

Adegoke told Nairametrics that she wouldn’t have shared the information if the caller had not answered a few security questions like her account number, digits on her ATM card, and Date of Birth. She said, “I had no reason to doubt him after providing the answers. I never understood what he was up to and what the OTP meant and why he asked me to delete it immediately after I shared it with him. A few minutes later, I got a debit alert of N40,000, which was my pension for the month.

“At that point, I started sweating and knew I had fallen victim to fraudsters. But what I still don’t understand is how he got my account number and other personal details.”

READ: How scammers use SIM cards to rob your bank accounts

Mrs Abimbola Omole, 65, is another retiree and a victim of similar fraud. The retired civil servant is also a depositor with one of the Tier-1 banks, which has its headquarters in Marina, Lagos.

Omole had declined the offer of an ATM card through her account officer before travelling out of the country. The account officer had then proceeded to forge the customer’s signature to request the ATM card.

“I couldn’t believe my eyes when I got debit alerts that a sum of N150,000 was deducted from my account within three days,” a bewildered Omole reported. “When we traced the location of the withdrawal, we found it was in Onitsha. I am sure the banker must have disclosed my details to someone there because she had asked me to lend her money before I travelled,” she recalled.

Adegoke and Omole are only two of several bank depositors, especially elderly citizens, who have been fleeced by fraudsters masquerading as bank staff. These crimes are unmistakably and increasingly targeting a specific class of people – vulnerable elderly people.

READ: How thieves use Covid-19 to defraud bank accounts

Ex-bankers share their experiences

Sources across the top banks revealed that many bankers engage in various fraudulent activities as a result of laxity on the part of some officials in the internal control departments at various levels. Nairametrics found that many of these frauds were perpetrated by third parties in connivance with insiders, targeting mostly elderly customers within the 60-70 years age bracket, who may expectedly not be tech-savvy. This is usually done by requesting that the unsuspecting customers provide vital information such as their Personal Identification Number (PIN), which the fraudsters then use to debit their accounts.

“We treat scores of fraud cases every year and most of them are done in connivance with senior officials of the bank at the branch level. Recently, a fraudster got the PIN of a customer and withdrew N100,000 from the account on a particular Sunday,” a banker who pleaded anonymity told Nairametrics.

A former Manager of one of the Tier-1 banks, in an exclusive interview with Nairametrics, disclosed that three of the staff of the bank in Sokoto were arrested by the Economic and Financial Crimes Commission (EFCC) in March 2020. The bankers were arrested for conspiring to steal the sum of N1.2 million from a customer’s account and were said to have done so by issuing an ATM card in the customer’s name to an impostor who then proceeded to clean out the account.

READ: CBN releases new guidelines for OFIs, orders inclusion of NUBAN code or face sanctions

Although some of this money was later recovered by security agents, investigations reveal that the system is beset with several other unrepentant fraudsters still plying their craft at the expense of unsuspecting customers.

A banker with a Tier-2 bank also shared another case with Nairametrics, which was uncovered by EFCC. According to her, the anti-graft agency uncovered a criminal syndicate of bankers who specialized in forging signatures of deceased bank customers and stealing from their accounts. They also execute fraudulent financial transactions, including unauthorized debits of depositors’ funds.

Jaiz bank

The alleged members of this syndicate were in March, arraigned before a Judge of the State High Court in Uyo on a 23-count charge bordering on conspiracy, forgery, obtaining by false pretense and criminal conversion, depositors’ funds to the tune of over N37.6 million.

One of the accused persons was found by the EFCC to have used his position as the Head, Operations and Transaction Service and Delivery, to collude with third parties and establish the syndicate which specialized in perpetrating fraudulent transactions and deductions.

Further investigations also showed that without the authorization or knowledge of the management of the bank, the defendants managed a fictitious fixed deposit account with interest accruing to it.

READ: Personal data of 533 million Facebook users leaked on a hacking forum

What they are saying

Head of Media, EFCC, Mr Wilson Uwujaren, disclosed that the anti-graft agency had prosecuted scores of bankers who had either swindled depositors or the banks in different cases.

He added that there were yet more cases pending in Federal High Courts in Port Harcourt, Rivers, Yenagoa, Bayelsa, Edo, and Lagos States, among others.

“What happens is that when a staff of the bank is involved in such activities, the bank takes the person out of the system through dismissal. But now, we are going after the banks and the personnel used to perpetrate fraud,” he said.

Banks must fine-tune their internal control processes to better protect their customers as their failure to do this would be costly.

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Increasing use of mobile

Mobile adoption in Nigeria has risen over the last half a decade as the Central Bank’s policies on financial inclusions have increased reliance on mobile phones as a tool for conducting banking activities.

According to the latest data from the NIBSS, Mobile transactions in Nigeria (mobile & USSD) surged by 82.6% in 2020 to stand at 1.69 billion compared to 928.86 million recorded in the previous year.

Banks also earned a whopping N216 billion from digital banking transaction, buttressing just how critical mobile is to shoring up bank revenues.

Despite this heavy reliance on mobile as a strategic tool for financial inclusion, fraudsters are also benefiting just like the banks.

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper.The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference.The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Exclusives

Corporate Nigeria spends N31.22 billion on travel expenses in 2020

According to data obtained by Nairametrics Research, travel expenses of major corporations in Nigeria dipped by 36.97% in 2020.

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Corporate Nigeria represented by the largest listed companies on the Nigerian Stock Exchange experienced a reduction in business travel expenses in the year 2020.

According to data obtained from the audited financial statements of the top 30 companies listed on the Nigerian Stock Exchange (NSE) known as the NSE-30 and verified by Nairametrics Research, travel expenses dipped by 36.97% from N49.54 billion recorded in 2019 to N31.22 billion in 2020.

Travel expenses include flight tickers, hotel expenses, cost of renting and maintaining private jets, local interstate and intrastate transportation etc.

  • Of the 30 companies considered, only 3 of them increased their travel expenses in 2020. Notably, Guinness increased its travel expenses by 283.1% from N261.4 million to N1 billion in the review period.
  • Nascon Allied Industries and Presco Plc incurred a sum of N91.8 million and N2.02 billion in travel expenses, representing a 125.2% and 33.7% increase respectively.
  • On the other hand, MTN Nigeria recorded the highest decline in travel expenses, reduced by 79.9% to stand at N964 million as against N4.79 billion recorded in 2019. Stanbic IBTC followed with a decline of 60.95% to stand at N676 million.
  • It is worth noting, that some companies were not included in this study as they did not disclose their travel expenses during the period under review.

READ: Banks earn N216 billion in E-banking income amidst threat from challenger banks

Why the drop?

The drop in travel expenses was expected as the entire private sector experienced a lockdown for most parts of the year due to Covid-19. The Federal Government introduced movement restrictions on land, sea, and air commute in response to the spread of the Covid-19 virus.

  • This resulted in the cancellation of business travel expenses across the commercial and political nerve centres of the country. Bearing the brunt of this cut in expenses were airlines, hotels, and the entire travel industry who suffered massive revenue losses.
  • The travel industry has been one of the worst-hit sectors due to the COVID-19 outbreak with lockdowns, travel bans, restrictions, and quarantines, which have had a severe impact on business travel for corporate entities in Nigeria.
  • High travel cost implications, hotel rates, and reduction of airline services also made companies resort to phasing out in-person meetings and business travel, as it is more affordable and productive to go digital.
  • The deployment of technology has helped companies cut their travel expenses since part of the key reasons for business travel is for conferences, meeting suppliers and customers. Going forward, video calls show strong potential to replace in-person meetings, resulting in fewer business travels.
  • Additionally, business travels that are meant for training and other learning activities can be done through e-learning.
  • The consistency of corporate entities in adopting technology by going digital will likely continue to reduce business travel expenses of corporations in the country.

READ: Nigerian corporates spend N1 trillion on capital investment in 2020

Gains and losses

On the flip side, online virtual work from home tools such as Microsoft Teams and Zoom recorded massive revenue boost as the private sector and even government relied on them to connect with clients, employees and other stakeholders.

  • Unfortunately, Nigerian businesses, particularly the tech sector failed to take advantage of the travails of the hospitality sector losing much of this revenue to the likes of Microsoft, Google, Netflix, and Zoom. Nevertheless, other Nigerian tech companies, especially in the entertainment, payment, savings and loans space all recorded a significant boost in topline revenues.

The top 5 spenders

The increase or drop in travel expenses for some of the companies under review suggests the approach management took in response to the Covid-19 lockdown. While some reacted by going completely remote as indicative of their numbers, others continued spending, perhaps due to an inefficient cost structure that could not be scaled down despite the imposed lockdown.

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Access Bank (N7.15 billion)

Access Bank Plc spent a total of N7.15 billion on business travel expenses in 2020, representing a reduction of 31.9% compared to N10.5 billion recorded in the previous year.

  • The tier-1 bank accounted for 22.9% of the total travel expenses incurred by the top 30 companies on the NSE.
  • The bank’s total asset as of December 2020, stood at N8.67 trillion, representing the highest on the NSE.

UBA (N4.94 billion)

United Bank for Africa incurred a sum of N4.94 billion on business travels in the year 2020. Its travel expenses reduced by 30.1% compared to N7.06 billion recorded in 2019.

  • Its expenses accounted for 15.8% of the total recorded by companies under consideration.
  • UBA recorded a growth of 27.7% in profit after tax from N89.1 billion recorded in 2019 to N113.8 billion in 2020.

FBN Holdings (N3.51 billion)

FBN Holdings the parent company of First Bank of Nigeria, one of the major financial institutions in the country, spent a total of N3.51 billion on travel expenses in the year under review.

  • The tier-1 bank reduced its business travel expenses by 48.24% from N6.78 billion recorded in 2019 to N3.51 billion.
  • Also, FBN Holdings accounted for 11.2% of the total business travel expense of the companies under consideration.
  • It is worth noting that FBN Holdings classified its travel expenses as passages and travels.

 

Dangote Cement (N2.11 billion)

The most capitalized company on the Nigerian Stock Exchange, valued at N3.7 trillion spent a total of N2.11 billion on business travel expenses in 2020.

  • The foremost cement manufacturer in Nigeria recorded a 13.8% decline in travel expenses from N2.45 billion recorded in 2019 to stand at N2.11 billion in 2020.

Presco Plc (N2.02 billion)

Presco Plc, a fully-integrated agro-industrial establishment specializing in the cultivation, extraction, refining, and fractionation of crude palm oil into finished products, spent a total of N2.02 billion on travel expenses in 2020.

Jaiz bank

Its travel expenses in 2020, represent a 33.71% increase compared to N1.51 billion recorded in the previous year.

  • It also accounted for 6.5% of the total travel expenses recorded by the companies under consideration.

Bubbling under

  • Zenith Bank – N1.88 billion
  • Seplat – N1.26 billion
  • Guinness – N1 billion
  • MTN Nigeria – N964 million
  • Fidelity Bank – N964 million

Note: Fidelity Bank classified its expenses as travelling and accommodation, while MTN Nigeria as Trainings, travels and entertainment cost.

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Exclusives

New Management set to take charge at GT Bank as list of appointment and exit leaks

A major Management restructuring is at the final stages of completion at GTB, one of Nigeria’s most respected commercial banks.

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GTBank declares dividend payment for FY 2019

A major Management restructuring is at the final stages of completion at Guaranty Trust Bank, one of Nigeria’s most respected commercial banks.

Sources with knowledge of the matter informed Nairametrics that a clean sweep of top management staff above the age of 45 has been effected as current maverick MD/CEO Segun Agbaje prepares to retire as MD/CEO of the bank and proceed as MD/CEO of the bank’s Holding Company.

Segun Agbaje is expected to leave following the end of his 10-year tenure as Managing Director of the bank.

According to multiple sources, the bank is set to announce Miriam Olusanya as its new Managing Director. We understand the Central Bank has already been notified and a formal announcement could be made anytime soon.

READ: BankTech War: Segun Agbaje says GTBank not afraid of Fintech

In an internal memo dated April 28, 2021, and seen by Nairametrics, Thomas John has been appointed Managing Director of GTB West Africa while Bayo Veracruz was appointed Managing Director of GTB East Africa.

Others are Olayinka Odusote as Divisional Head, Digital Banking, an important position considering the bank’s ambition to transform into a full-fledged digital bank. Ijeoma Esemudje is appointed Divisional Head Corporate Bank Mainland & Agric.

As part of the management restructuring already in effect, two of the oldest and revered Executive Directors of the bank have already been asked to retire after illustrious years of service to the bank. Nairametrics also understands 4 General Managers out of 9 have also been asked to exit the bank paving the way for younger executives mostly under the age of 45 to take charge.

A list of appointments and exits purportedly approved by the board is already being circulated across several social media groups on WhatsApp and Telegram. Nairametrics cannot confirm the authenticity of the list and although officials at the bank did not confirm the list, they stated that a press release would soon be made to announce the appointments.

READ: GTB, Zenith, UBA lead banks with highest social media followers 

Recruitment vs Selection Process?

In September 2020, Agbaje disclosed during the bank’s investor earnings call that GTBank was already looking for its next Managing Director. According to him, five of the bank’s Executive Directors were in line for the top job and were at the concluding stages of the recruitment process.

He said:

“What we are looking for now is a Managing Director for Guaranty Trust Bank Nigeria. The process has started; we have 5 Executive Directors and so all of them are going through the process at the moment.

We are working with a consulting firm in the UK ….. at the end of this process which will end at the beginning of the fourth quarter, we will have a Managing Director for GT Bank Nigeria.”

Jaiz bank
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