BY BAMIDELE FAMOOFO
Nigerian banks reported cases of frauds and forgeries valued at about N58.85billion in the financial year ended December 31, 2021.
A report obtained from the Financial Institutions Training Centre by The Point showed that about N2.96billion was completely lost to the acts of frauds reported by the banks in the review period.
Bank workers are increasingly involved in defrauding their employers as total insider involvement increased from 73 in first quarter of 2021 to 410 in fourth quarter in 2021 while a total of 25 persons were relieved of their appointments.
The number of outsiders involved in the crime of defrauding banks stood at 71,791 in 2011 while total cases of frauds and forgeries reported to the FITC in the period stood at 139,847.
FITC received 70 returns from 24 deposit money banks on incidences of frauds and forgeries in the second quarter of 2021. An analysis of these returns reveals that 22 returns were received in April 2021, 24 returns were received for May 2021 while another 24 returns were received in June 2021 respectively.
A total of 33,641 cases of Frauds and Forgeries were reported in the second quarter of 2021, compared to 59,445 reported cases in the first quarter of 2021, indicating a decrease of 43.41 percent between the periods.
The most prevalent fraud types during the periods included Computer/Web fraud, Mobile Banking fraud, and ATM Frauds.
The total amount reported to be involved in fraud cases during the period decreased by 41.47 per cent to N6.84 billion from N11.69 billion while the amount lost to fraud incidents also decreased to N594.18 million from N726.4 million reported in the first quarter of 2021 indicating a fall of 18.21 percent.
The decrease in the amount involved in and amount lost to frauds could be attributed to improved security measures on electronic platforms of deposit money banks and stringent internal control measures in bank branches in the quarter under review.
A ranking of fraud types according to the magnitude indicated that Web Fraud ranked first at N4.52 billion (66.07 per cent), Fraudulent Withdrawals Frauds ranked second at N815.6 million (11.91 per cent), while Mobile Frauds and ATM Withdrawals Frauds ranked third and fourth at N688.4 3illion (10.06 per cent) and N327.9 million (4.79 per cent) respectively.
Fraudulent Withdrawals frauds contributed N257.9 million (43.41 percent) to the amount lost to frauds, Forged cheques with forged signature ranked second with N138.3 million (23.28 per cent), while Mobile Frauds accounted for N132.8 million (22.35 per cent) of the total amounts lost to frauds in the quarter under review.
During the second quarter of 2021, fraudulent activities were perpetuated through different channels such as the ATMs, Web, Mobile Banking Platforms, Bank branches and PoS (Point of Sale) terminals.
The instruments used to carry out most fraudulent activities in Q1 2021- were Cards and Cash while Cheques and slips accounted for a lesser percentage of the amounts involved and lost to frauds in the quarter.
Analysis of banks’ returns with regards to the payment channels, show that the volume of frauds decreased on all five parameters (Web, ATM, Bank branch, Mobile and PoS.
Data showed that the amount involved in frauds through web and ATM decreased by 45.03 per cent and 74.17 per cent to N4.3 billion and N246.1 million from N7.9 billion and N952.9 million while frauds perpetrated through bank branches and mobile channels declined by 30.55 per cent and 3.93 per cent to N1.07 billion and N1.04 billion from N1.5 billion and N1.08 billion reported in the first quarter of 2021. Similarly, frauds through PoS channels fell by 29.87 per cent to N105.1 million from N149.8 million in the previous quarter.
During the fourth quarter of 2021, fraudulent activities were carried out using a range of channels, including ATMs, Web and Mobile Banking Platforms, Bank branches, and POS (Point of Sale) terminals.
Cards and cash had the highest frequency for instruments used to carry out fraudulent activities in Q4 2021, while cheques and slips accounted for a lower frequency of the amounts involved in and lost to frauds.
Statistics reveal that a decrease was recorded in the amounts involved in web and mobile fraud by 66.07 percent and 14.02 percent, from N3.01 billion to N1.02 billion and from N707.6 million to N603.3 million respectively.
Fraud recorded through bank branches decreased considerably by 91.61 percent bringing it down to N2.6 billion from N30.5 billion.
Further analysis shows that an increase of 104.63 percent and 79.85 percent was also recorded for ATM and POS frauds bringing it to N807.2 million and N124.9 million, from N394.5 million and N69.5 million respectively in the previous quarter. The amount involved in agent fraud increased by 100 percent in comparison with the previous quarter, from no agent related fraud to an involved amount of N2.9 million.
