Facts emerged on Tuesday that electronic fraudsters had
been duplicating Automated Teller Machine cards belonging to Nigerian bank
customers and using them to buy items worth millions of dollars from shopping
malls in the United States.
Top officials of the Central Bank of Nigeria told our
correspondent that the development had made Nigerian banks and their customers
to be losing millions of naira to the e-fraud.
The development, it was learnt, had become so overwhelming
and that top executives of the banks and senior officials of the CBN had to
meet with a team of Economic and Financial Crimes Commission operatives led by
the director of operations in Abuja on Tuesday.
According to sources close to the meeting, the banks are
seeking the assistance of the anti-graft agency to help in arresting some of
the fraudsters who are using the duplicated ATM cards in the US.
From the outcome of the meeting, the EFCC is set to
collaborate with a sister agency in the US in order to effect the arrest of
some of the electronic fraudsters.
The source disclosed, “Banks have been losing a lot of
money to electronic fraudster cartels who are using customers’ ATM cards to fraudulently
buy items across shopping malls in the US.
“Normally, customers should bear the loss but because banks
don’t want the issue to come to the public so that the use of ATM cards will
not be discouraged, they settle those customers by paying the money.”
Asked how the Nigerian ATM cards are being duplicated and
used in the US, a source close to the development explained, “In Nigeria, we
use chip and PIN, but the US still uses magnetic stripe. So, what those
fraudsters do is to get the details of a customers’ ATM card, duplicate it and
then go to shopping malls and start using it to buy items.
“When they are using the PoS in US shopping malls, all they
do is to swipe the card and then payment is made. They don’t need to put any
PIN. Through these, items are bought using Nigerian ATM cards.”
An EFCC source, who spoke under the condition of anonymity,
confirmed the meeting and noted the anti-graft agency was set to work with the
US government to arrest the fraudsters.
A top official in one of the top banks said the incidence
of electronic frauds had been on the increase and the development was a source
of worry to bank executives.
It was learnt that most of the frauds were being
perpetrated in connivance with some bank officials.
The official recalled that prior to 2010 when Nigerian
banks were still using magnetic stripe for ATM cards; the issue of using
Nigerian ATM cards fraudulently abroad was prevalent.
However, when the banking sector migrated to the chip and
PIN system, the problem stopped.
“However, the frauds have started again now in a new form
of Nigerian ATM cards being duplicated and used abroad. The incidence is
becoming very high now and something has to be done urgently to arrest the
trend,” the banker added.
Analysts have said that the increasing incidence of
electronic frauds may affect the growth of the cash-less Nigeria initiative.
The Deputy Governor, Corporate Services, CBN, Mr. Adebayo
Adelabu, recently said at a conference that the incidence of fraud involving
bank officials had been on the increase.
Adelabu, who is a former Executive Director of First Bank
of Nigeria, linked the increasing frauds in the banking sector to several
issues, including the banks’ poor recruitment procedures and failure to
prosecute workers involved in fraudulent activities for fear of reputational
risk.
The Chairman, Chartered Institute of Bankers of Nigeria,
Lagos branch, Mr. Abolade Agbola, linked the high incidence of electronic
frauds to lack of integrity and poor staff conditions in the banking sector.
“When you see the fraud that happens and the trillions of
transactions that take place daily, then I think the banks have to take the
technology ahead, take the staffing ahead and then create a future for the
members of staff so that they can know that they have a future in the
organisations and that they can build a future,” he said.
