Bank officials ‘stole’ N81.69bn from customers’ accounts in three years – Investigation

  • 80, 658 customers duped in 2023 in Lagos, Rivers, Abuja, Ogun, Oyo, Kaduna
  • Banks sack more than 100 workers over 967 fraudulent cases – FITC
  • We’re losing hope in commercial banks – Customers lament
  • Experts urge CBN to introduce sanctions, eliminate policies that promote corruption

More than 100 bank workers of different levels have lost their jobs in the lucrative sector due to fraudulent cases in the last three years (2021-2023), according to investigations conducted by The Point at both the Financial Institutions Training Centre and the Nigeria Inter-Bank Settlement System.

According to the investigation, the fraud cases which are not only limited to insiders (bank officials) have caused a huge loss to customers of the affected banks and the respective Deposit Money Banks.

“Reports of Fraud and Forgeries in Nigerian Banks’’ released by the Financial Institutions Training Centre between the second quarter of 2021 and Q2 2023, showed that about N18.01billion was lost due to fraud committed by bank staff and outsiders within the reviewed period out of a total of N81.69 billion involved in fraud cases.

The highest amount lost was N5.79 billion in Q2 2023, while the lowest amount lost was N472.28million in Q1 2023.

For the total amount involved, the highest amount was N34.78 billion in Q3 2021, while the lowest amount was N1.18 billion in Q2 2022.

A breakdown showed that while only four bank officials were sacked in Q2 2021, the figure rose by 175 per cent to 11 in Q2 2023.

The highest number of sacked top bank executives and junior staff members was recorded in Q3 2022. Only 20 officials were fired.

Also, between Q2 2021 and Q2 2022, 52 bank staff members were sacked for fraud-related issues.

However, between Q3 2022 and Q2 2023, 58 bank staff members were sacked for the same reason.

Also, within the period under review, the sacked staff members were involved in a total of 967 fraud cases.

The highest number of cases was recorded in Q4 2021, with 410 cases involving bank staff, while the lowest was recorded in Q3 2021, with 32 cases.

The report showed that between Q2 2021 and Q2 2022, bank staff were involved in 657 cases, while between Q3 2022 and Q2 2023, they were involved in 310 cases.

Findings by The Point at FITC showed that mobile fraud, computer/web fraud, and P0S-related fraud were the most prevalent types of fraud, and this trend persisted in Q2 2023.

“A total of 80,658 individuals were reported to have been defrauded in 2023, with the highest percentage of defrauded individuals residing in Lagos, followed by Rivers, Abuja, Ogun and Oyo.”

Similarly, a report released by NIBSS showed that in 2023 alone, about N17.67 billion was lost to different fraud cases reported by banks.

This was disclosed in its Annual Fraud Landscape (January to December 2023) published on its website.

A total of 80,658 individuals were reported to have been defrauded in 2023, with the highest percentage of defrauded individuals residing in Lagos, followed by Rivers, Abuja, Ogun and Oyo.

According to NIBSS, the total fraud count decreased by six percent to 95,620, while actual losses from fraud increased by 23 percent in 2023.

The highest number of frauds was recorded in May 2023 with 11,716, followed by February with 9,492.

However, October saw the highest actual loss in 2023 at N3.7 billion, followed by January with N2.7 billion.

According to the data submitted to NIBSS by financial institutions via the Industry Fraud Reporting Portal, the mobile channel remains the preferred means for fraud, as it increased by five percent compared to the previous year.

It was also reported that the web and POS channels were the most exploited payment channels by fraudsters last year.

The count of web fraud decreased by 38 percent and ATM fraud recorded a 64 percent reduction. The mobile channel was the most profitable channel for fraudsters in 2023 with a fraud interest index of 34 percent.

It was followed by internet banking and PoS with 33.99 percent and 26.37 percent, respectively.

The fraud interest index shows the channels with the best return on interest for fraudsters.

In the year under review, individuals aged 40 and above remained the primary targets of fraudsters, which NIBSS said signified a persistent focus on the targeting strategy of fraudsters.

“This sustained trend emphasizes the enduring appeal of the demographic group as potential victims, reinforcing the need for continuous efforts to educate and protect individuals in this category from fraudulent activities,” it stated.

In 2023, 80,658 customers fell for the gimmicks of fraudsters, four percent less than 84,130 customers recorded in the previous year.

“This decline, though apparent, does not diminish the severity of the issue, urging the financial industry to remain vigilant, enhance security measures and collaboratively address the tenacious challenges posed by fraud. Some regulations need thorough examination, modification, and reinforcement to reduce the potential for fraud and enhance the chances of successful recuperation,” the report maintained.

The report indicated that Ogun and Kaduna States were also hotbeds for financial fraud in the country.

In terms of fraud count and actual loss recorded in the year, Lagos recorded the highest values, indicating 48 per cent and 49 percent, respectively.

The report stated that financial institutions lost about N17.67billion to fraud in 2023.

Lagos did not make significant progress in the fight against financial fraud, as the number of recorded cases worsened to 46,224 last year from 45,952 in 2022.

Meanwhile, it succeeded in cutting down the value of loss from fraud by 12 percent to N8.7billion, compared to N9.9bn in the previous year.

We’re losing hope in commercial banks – Customers lament

However, some bank customers in the country have lamented the increasing spate of ‘illegal’ withdrawals from their accounts.

Some of the customers who were victims of the act said this in an interview with The Point at the weekend
They described the act as fraudulent which the authorities must urgently address.

They also alleged that most illegal deductions in banks were being done in connivance with bank staff.

A customer with one of the new generation banks, Miss Helen Isiguzu, said that fraud was being perpetrated in almost all the banks unlike before, adding that it was more rampant in some banks.

“What is happening in banks these days is discouraging me from depositing my money with them.

“No wonder the Central Bank of Nigeria said there is so much money in the hands of Nigerians outside the banks.

“People are beginning to lose hope in commercial banks.

“Instead of my money to develop wings and disappear from my account just in a day, I rather invest it into real estate business and it will yield greater profits,’’ she said.

Another customer with one of the new generation banks, Mrs. Anthonia Ibedalu, said that some banks in the country were operating below international standards.

Ibedalu called on relevant authorities, including the Federal Competition and Consumer Protection Commission to step up actions and save customers from fraudulent activities in some banks.

“I travelled to South Africa for a period of three years but I had a dollar account in one of the banks.

“When I got back to Nigeria for the holidays, I decided to take the money but to my surprise, I was told the money was no longer there.

“I enquired to know what happened but was told my account was hacked into. I wondered how an account that no other person had the details could be hacked into.

“When I contacted higher authorities in the bank, they investigated and my money was refunded.

“They did not tell me the result of their investigation but from their responses, it was an insider thing. I now ask, what if I didn’t know who to contact,’’ she said.

Experts urge CBN to introduce sanctions, eliminate policies that promote corruption

Commenting on the worrisome trend of fraud in the financial system, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, urged the CBN to introduce sanctions and eliminate policies that promote corruption.

He said, “I think what they can do is to activate sanctions on anyone found wanting. Aside from the tracking, there must be evidence. And once there is evidence, they should close in on anyone they find. Cyber fraud is the biggest threat in the banking industry.’’

The FITC has equally advised banks to strengthen their security protocols and utilise advanced fraud detection systems.

It said, “Considering the rise in the total amount involved in fraud cases and the amount lost, Nigerian banks should strengthen their security protocols and systems to prevent unauthorized access to customer accounts and sensitive information. This may involve incorporating measures such as multi-factor authentication, implementing strong encryption techniques, and ensuring regular security updates are in place.”

A former banker, Louis Otagoro, appealed to the Chartered Institute of Bankers of Nigeria to ensure that only trained professionals practice in the industry.

“The CIBN should step up actions to ensure that the banking profession does not become an all comers affair,’’ he said.

Compliance officers conniving with fraudsters – EFCC

Meanwhile, the Economic and Financial Crimes Commission has said compliance officers of banks across the country are conniving with fraudsters, urging them to desist from unauthorized disclosure of its investigation activities and request from banks to their customers.

The commission’s executive chairman, Ola Olukoyede, who gave the warning, last week during a meeting with compliance officers of banks in Ibadan, said that the commission was aware that some compliance officers were giving some information to customers.

Olukoyede, who spoke through the acting zonal director of the Ibadan zonal command, Hauwa Garba Ringim, decried the unhealthy support fraudsters receive from the banking sector in Nigeria.

The commission boss stressed that such an act was posing considerable challenges and concerns to the commission, saying “The EFCC is aware of the fact that compliance officers give information to their clients regarding letters of investigation activities written to the banks from the EFCC.”

He insisted that such attempts usually jeopardize the investigation exercise of financial crimes and delay corruption cases from being filed before the law court.

According to him, it is posing considerable challenges and concerns to the commission.

The EFCC’s boss also urged them to always respond to letters received from the Commission with certified true copies, including instruments of transactions of beneficiaries or sources, as this will expedite the process of investigation to a logical conclusion.

Olukoyede maintained that illegal dealings and trading in naira with the Point-of-sale (POS) operators must stop.

“What we notice and see around lately is that Nigerians can only withdraw a small amount of their money with the banks in Automated Teller Machine (ATMs) but POS operators evidently go around with huge amounts of money gotten from the banks.

Bankers on trial

Two weeks ago, the Osun State Police Command said it had arrested a manager in one of the branches of a first-generation bank in Osogbo, Adeniyi Talabi, for allegedly stealing a sum of N650m belonging to 35 customers of the bank.

A statement by the spokesperson of the command, Yemisi Opalola, claimed that the suspect perpetrated the fraud by obtaining the amount under false pretence from the victims and stealing the amount through an illegal transaction called proof of funds.

Opalola, who noted that the suspect had been suspended by the bank, added that an investigation into the case was progressing smoothly.

She also said Talabi and his accomplices would be charged in court upon completion of an investigation.

The statement partly read, “The Osun State Police Command in its efforts to rid off criminal elements from the state has arrested a serial fraudster, one Adeniyi Sunday Talabi, ‘m’ 47 years, a resident of Army Barracks Area, Kelebe, Iragbiji Road, Osogbo, a manager in one of the First Bank PLC branches in Osogbo for an offence of fraud, Obtaining money under false pretence (OBT), Conversion and Stealing amounting to the sum of N650, 850,000 in an illegal product called PROOF of FUNDS which involved a total number of 35 victims (people).

“It is worthy to note that the said suspect has been suspended by the First Bank Nigeria Plc, his former employer. Investigation into the case has since commenced and the suspect and his accomplices will be charged to court upon completion of the investigation.”

She also said the state Commissioner of Police, Mohammed Umar, re-assured residents of the command’s commitment to rid the state of criminal elements and warned perpetrators of crimes that Osun would not be a haven or a hibernating ground for them.

The EFCC had also said that most banking fraud handled by the Commission showed that bank employees aided the dubious acts.

Two weeks ago, a former First City Monument Bank manager, Nwachukwu Placidus, was sentenced to 121 years in jail by Justice S. N. Odili of the Anambra State High Court in Onitsha, Anambra State.

Placidus was found guilty of stealing N112, 100,000 from a customer’s fixed deposit funds for personal benefit.

The EFCC, Enugu Zonal Command, had arraigned Placidus on March 27, 2018, on 16 counts of forgery, stealing, obtaining by false pretence, and uttering.

The EFCC which made the announcement in a statement posted on its Facebook page said, the ex-manager, Placidus pleaded not guilty when the charges were read to him.

The statement read, “Justice S. N. Odili of the Anambra State High Court sitting in Onitsha, Anambra State, has convicted and sentenced a former manager with First City Monument Bank, Onitsha branch, Nwachukwu Placidus, to a cumulative 121 years imprisonment for diverting fixed deposit funds of a customer to the tune of N112,100,000 for his personal use.

“In the course of trial, the EFCC, through its counsel, Mainforce Adaka Ekwu, presented four witnesses and tendered several relevant documents, which were admitted as evidence.

“Justice Odili held that the prosecution proved its case beyond reasonable doubt and sentenced the convict to nine years imprisonment on count 3, four years on count 4, and nine years on counts 5 to 16, respectively, but was discharged on counts 1 and 2. The sentences shall run concurrently.

“I think what they can do is to activate sanctions on anyone found wanting. Aside from the tracking, there must be evidence. And once there is evidence, they should close in on anyone they find. Cyber fraud is the biggest threat in the banking industry”

“The court further ordered the convict to restitute the said sum to his victim, Idemili Microfinance Bank.”

Also, the Enugu Zonal Command of the EFCC has arraigned one Daniel Chukwuka Koussou, a forex broker before Justice C. O. Ajah of the State High Court sitting in Independence Layout, Enugu State.

He was arraigned on a one-count charge bordering on criminal conversion and stealing to the tune of N112, 800, 800. 00.

The lone count charge reads; “That you, Daniel Chuwuka Koussou sometime in July 2022, in Enugu, Enugu State within the jurisdiction of this Honourable Court did commit a felony to wit: stealing by fraudulently converting to your own use the sum of N112, 800, 800. 00 (One Hundred and Twelve Million, Eight Hundred Thousand, Eight Hundred Naira), property of Chinedu Igbokwe and thereby committed an offence”.

The offence is contrary to Section 342 of the Criminal Code Law, Cap 30 of the Laws of Enugu State and punishable under Section 353 (1) of the same Law.
The defendant pleaded not guilty when the charge was read to him.

In view of his plea, counsel to the EFCC, Ahmad Yusuf Abdullahi prayed the court for a trial date and for the defendant to be remanded at Enugu State Correctional facility.

However, the defence counsel, Ogechukwu Agbo informed the court about a motion on notice for bail for her client. Abdullahi vehemently opposed the said application on the grounds that “the defendant might jump bail considering the weight of the allegation my lord.”

After listening to both sides, Justice Ajah granted bail to the defendant in the sum of N50 million and two sureties in like sum. The sureties must be resident within jurisdiction. They must swear an affidavit of means, show evidence of tax payment for the past three years, deposit two full size photographs, be public servants of not less than Grade Level 16 and they must be verified in writing by the prosecution.

The defendant was thereafter remanded at the Enugu State Correctional facility pending the fulfillment of the bail conditions.

Koussou was arrested following claims of a petitioner who alleged that he sent $276, 000 to the defendant, a supposed agent for Providus Bank, to convert into Naira and return the same.

According to the petitioner, on July 6, 2022, Providus Bank paid Koussou the full money in Naira but the defendant sent part-payment of N21, 759, 771 to him (the petitioner) and diverted the rest for his personal use. All efforts made to get him to pay up proved abortive.