As of the third quarter of 2022, there had been around N3.62 billion worth of fraud committed using cash, automated teller machines (ATMs), point of sale (PoS) devices, mobile devices, and other electronic channels, Entrepreneurng report.
All cash theft instances reported during the period, according to the FITC’s “Report on Frauds and Forgeries in Nigerian Banks” Q3, 2022, were committed by bank employees.
According to the 18-page report, specifically, 19. 314 cases were reported in the third quarter of 2022, down from 20. 195 cases were observed during the same period in 2021, or 4.36 percent fewer cases overall.
However, the overall sum involved fell from N34.8 billion to N9.62 billion, a reduction of 72.34 percent. However, the overall loss during the same period in the previous year was N853,167,293.61 (2021) as opposed to N3.62 billion in Q3, 2022, which represents an increase of 324.50%.
According to FITC, the number of outsiders involved in the scams grew, going from 14,243 in Q3, 2021 to 16,125 the following quarter—an increase of 324.50%. Insider (employee) involvement dramatically expanded, rising by 250% from 32 in Q3, 2021 to 112 in Q3, 2022. In this time frame, 14 appointments were terminated in Q3 of 2021, and 20 bank employees were let go a year later.
With 10 people conspiring, four bank employees and five outsiders were involved in 22 reports of telling fraud throughout the review period, totaling N121, 763,258.91 with an estimated loss of N83.5 million.
Four bank employees and 12 outsiders were engaged in 36 reported forgeries of checks and signatures totaling N521, 349,800.96, but N305.4 million was lost, according to FITC.
The report states that 8830 incidences of computer/web fraud occurred, involving 8911 outside parties and six bank employees. N305, 495,175.25 was lost in this, and N2, 621,953,247.60 was involved.
In terms of mobile fraud, 6631 fraud cases in total were reported, with 33 bank employees and 5194 outside collaborators participating. In this instance, according to FITC, N2, 669,417,856.44 was at stake, and N1, 222, 095,081.99 was misplaced within the period under consideration. 16 bank employees were engaged in 16 reported incidences of cash theft totaling N569.6 million, of which N452.2 million was stolen.
According to the FITC, there were no instances of clearing fraud, unlawful bank document printing, account fraud, foreign exchange fraud, cross-firing of checks, or kite flying throughout the period.
FITC stated that even while there has been a general drop in fraud instances, the amount involved, and the amount lost, banks still need to strengthen internal control procedures to ensure that fraud is actively avoided.
The company praised the banking institution for reducing the frequency of fraud, the amount involved, and the amount lost.
The Financial Industry Transparency Council (FITC) stated that there is a need to review the fraud control measures in place in the actual bank branches because there has been a consistent rise in the amount involved in fraud activities and, consequently, an increase in the amount lost in the bank branches.
It states that to decrease fraud incidents within bank branches, all fraud control touchpoints must be carefully examined for gaps, and once these gaps are found, efforts must be made to close the gaps to prevent subsequent occurrences.
In conclusion, banks should continue to educate their clients about the need of protecting their personal information across a variety of channels and financial platforms.
Source: The Guardian