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.”
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.
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.
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.
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.
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.
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.