Bank customers in Nigeria lost over N3.35bn to fraudsters in the third quarter of last year. The criminals took advantage of the Coronavirus Disease and several government interventions to defraud unsuspecting bank customers.
Data released by the Nigeria Inter Bank Settlement System, the custodian of banking sector data, showed that 68 per cent of fraud perpetuated in Q3 2020 was through social engineering.
Social engineering is when fraudsters trick individuals to reveal personal data that could be used to access their bank accounts.
Last year, fraudsters sent messages via WhatsApp and Short Message Service telling people to fill a form to benefit from some of the fund being shared.
Also the Federal Government’s N-Power website was cloned, as individuals filled out sensitive information on phony websites.
These, alongside the phishing emails and SMS, culminated in increased loss to fraud last year.
According to data from NIBSS, attempted fraud value rose by 44 per cent in Q3 2020 compared to Q3 2019, while actual loss value for Q3 2020 rose by 500 per cent compared to Q3 2019.
In Q3 2019, there was 10,692 attempted fraud with a value of N1.09bn, while actual loss was N552m. The figure, however, rose to 16,988 attempted fraud with a value of N3.5bn of which actual loss to fraudsters was N3.35bn.
Meanwhile, the report revealed that online gambling and betting grew to be the preferred means of fraud proceeds utilisation.
Reasons for growing preference by fraudsters is the minimal Know Your Customer requirements for onboarding, authentication and the option for immediate cash-outs, which can be difficult to trace.
This medium, according to NIBSS, has become lucrative for fraudsters to cart away stolen funds.
To mitigate the use of these channels by fraudsters, NIBSS recommended that relevant stakeholders should ensure compliance to KYC requirements for opening wallet accounts.
