How Nigerian Bank Customers Lost N1.17 Billion to Frauds — FITC

A report by FITC has revealed that bank customers in Nigeria lost a total of N1.17 billion to fraud in Q2 2022.

FITC disclosed that data from 24 commercial banks shows that this amount was lost out of a total of N8.78 billion involved in fraud cases in the period.  

The data, however, shows a decline in the number of fraud cases across the banks compared to the first quarter of 2022. According to the report, a total of 27,356 incidents of fraud and forgeries were reported in Q2, compared to 40,522 reported cases in the first quarter of 2022, representing a 32.49% decrease between the periods. 

The total sum reported to be involved in fraud cases during the period also decreased by 40.05% from N14.65 billion in Q1 2022 to N8.78 billion in Q2 2022. Likewise, for the total amount lost due to fraud incidences, there was a slight decrease of 23.66% from N1.54 billion in the first quarter of 2022 to N1.17 billion in the second quarter of 2022. 

Channels of frauds:  The report shows that mobile fraud which includes fraud activities through USSD transactions had the highest occurrence followed by computer/web fraud and POS fraud. Highlighting the various channels where the frauds had been committed, FITC said: 

• “Evaluating the total amount lost to frauds in Q2 2022 reveals that Mobile Fraud accounts for 38.18% at N449 million loss, followed by Miscellaneous & other types of fraud accounting for 32.19% (N379 million) and Suppression of Entries at 11.02% (N129.64million).  
• “A closer look at the unusual amount recorded under the Miscellaneous fraud revealed that the fraud was carried out via E-naira for which the banks were liable. 
• “With regards to the returns by payment channel, the analysis reveals that there was a decrease in the amount lost to fraud via the Web, ATM and POS channels.” 

• “The amount lost via the Web channel decreased considerably from N1.07 billion to N98.4 million while the amount lost via the ATM channel decreased from N43 million to N5.9 million. On the other hand, an increase was noted in the amount lost via the Bank Branch, Mobile fraud channels, from N103.45 million to N618.24 million (497.56%) and N270.92 million to N449.03 million (65.74),” FITC added in the report. 

While stating that the overall decrease noted in the fraud incidences, the amount involved, and the actual amount lost is quite commendable for the banking institutions, FITC said it is necessary for banks to further strengthen their internal control measures for improved efficiency in pre-empting fraud activities and ultimate prevention of fraud. It added that there is also a need to o support the internal control measures through increased sensitization of customers on the prevalence of fraud activities and how to protect themselves from it. 

FITC is a not-for-profit professional organization, which has the Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC), and all licensed banks in Nigeria as members.