Online Fraud: Taming Global Underworld

Before 2014, Bank officials acknowledged growing incident of bank fraud carried out by online fraudsters. Today, while the number of attempted fraud cases is increasing, the revenue loss to the fraud stars is declining, because to a large extent, only the petty ones appears to be succeeding.
Officials of the Nigeria- Interbank Settlement System (NIBSS) PLC, said there is reduction of 45. 93 percent in attempted fraud and 63.07 percent reduction in actual loss in 2015, when compared with the figure of 2014. Banks have attributed the trend to caution on the part of workers, who have been giving a new orientation of how to protect customers’ deposits.
Those who spoke with The Guardian said they have since stepped up enlightenment campaigns among their customers on how to deal with Internet frauds.
“ We send all our customers messages everyday on what they should do when they receive strange messages asking them to click on a particular website for their account details. No banking process will ask a customer to do that. So we keep on telling customers to disregard such messages in order not to be duped. We have a way of communicating with our customers, even when we want to send them their account balance, or their account records. We will never ask them for their account details. So any message asking you to give your details is from fraudsters.
“Our customers are already aware. We also continue to tell them not to disclose the pin number of their ATM to anyone, not even to their children, husband and wife. It is supposed to be the secret into your account. Since we doubled our effort in this way, we have had less cases of e-fraud in the banking system,” a senior staff of First Bank said during the week.
Internet technology has enhanced easy living, but with it comes crisis of confidence because of associated fraud.
The NIBSS is worried that the slow adoption of cashless policy by Nigerians might not be unconnected with fraud associated with electronic banking.

According to NIBSS, the increasing use of the automated teller machine (ATM) and other electronic platforms have all contributed to accelerated growth of fraudulent activities, adding that cheques and over-the-counter fraud has given room to a sophisticated and more concise electronic type of fraud.
The reality with online scam is that it comes in different forms; scam mail, web cloning, identity theft and others.
In Nigeria, Internet banking and ATM form the lead channels for e-fraud in 2014. According to NIBSS, in 2014, Nigeria recorded 1,461 cases of fraud, compared to 822 in 2013, explaining that from the 1,461 cases, the value of attempted fraud reported was N7, 750, 152, 748, while the actual loss was N6, 215, 987, 323 in 2014, compared to N19, 148, 787, 069 attempts and N485, 194, 350 actual loss value reported in 2013.
While the volume of fraud increased during the second quarter of 2015, from 306 of 2014 to 1,447 of 2015, the period also recorded a reduction in the actual loss to fraud, as the figure fell from N447,816,146 to N354,332,019, during the same period in 2014 and 2015 respectively
In 2014, NIBSS said in a report that ATM machines experienced the most of fraudulent activities in terms of volume, while Internet banking actually accounted for a loss of about N3.2 b to fraudulent transactions in terms of value. It said during the period, a number of suspects and criminals were apprehended, adding that more work is required to encourage customer participation in other means of banking without stepping into a bank.
The NIBSS e-payment fraud landscape for 2014 revealed that adaptation to cashless policy is increasing, although slow. In 2014, it processed over 100 million transactions in terms of volume, with a corresponding value of over N40 trillion (over $208b). It also revealed that the volume of transactions grew by over 50 per cent between 2013 and 2014, with its value also growing by 28 per cent.
Central Switch has confirmed the increasing rate of e-fraud, saying fraud in the Nigerian electronic payments system has been on the increase over the past few years as technological advancement impact on the way people pay.
“In 2013, there were substantial number of fraudulent transactions, in terms of volume on Internet banking and Web based transactions. Also, across the counter accounted for almost N16b of the attempted fraud, which is the bulk of fraud witnessed in 2013,” a document from the central switch said.
A peep at the banking activities on the e-platforms, as contained in the NIBSS report, revealed that internet banking had 287 volume of fraud in 2014; e-commerce, 114; Point of Sales, 166; Web, 218; ATM, 491, Mobile 21. Non-electronic platforms, including Across Counter and Cheques recorded 153 and 11 volume of transaction respectively.
Giving more insight into the matter, NIBSS report said that in the first quarter of 2014, the country recorded 336 volume of fraud, which attempted value was put at N1, 003, 124, 742 with an actual loss of N172, 920, 263. In the second quarter, 298 volume of fraud was recorded, with and attempted value of N523, 849, 238 and actual loss value of N441, 714, 718 and 84 percent actual loss value in attempted fraud value.
The recent fraud figure from NIBSS indicated that while fraud volume is going up, the actual loss from the attempted fraud is reducing on the aggregate, perhaps due to public enlightenment and precautionary measures by the deposit banks.
The Head of Industry Security services at NIBSS, Olufemi Fadairo, who released the current fraud statistics, said there was 63.07 percent reduction in actual loss to electronic fraud, while volume increased by 45.93 percent this year.
For instance, during the first quarter of 2015, 1,097 volume of attempted fraud was recorded by the NIBSS, against the 360 for the same period in 2014. But there was remarkable increase in actual loss to the fraud, from N175,556,996 of the same period in 2014, to N387,346, 993 during the same period in 2015.
While the volume of fraud increased during the second quarter of 2015, from 306 of 2014 to 1,447 of 2015, the period also recorded a reduction in the actual loss to fraud, as the figure fell from N447,816,146 to N354,332,019, during the same period in 2014 and 2015 respectively.
Comparatively, the last quarter of 2015 witnessed an upsurge in fraud attempt when compared with the first and second quarters of the year, and when compared further with the same period of 2014.
Uduak Thomas, a bead maker in Surulere shared her experience; “I get mails from supposed banks, asking me to update my details or otherwise my account would be blocked. When I clicked the link, I saw a page asking me for personal details including my automated teller machine (ATM) pin. I closed the page, because I remember my bank sends me mails that it won’t ask me for personal details.”
Dunni Olabode, a marketer with a microfinance bank told The Guardian, “I actually received a mail from someone, who claims he had access to Sanni Abacha’s loot lodged in Ghana, and wants it moved, but needs a trusted person into who’s account the money would be moved, I deleted the mail immediately.”
From misleading or false information in chat rooms, to e-mails, making purchases on and offline, fraud has always been a concern to the regulators as Internet scammers are without borders.
Many Nigerians have narrated their encounter with e-fraudsters. Celebrities have suffered identity theft by cyber thieves; some have constantly harped on the need for fans to ensure they are following the right social media account, to avoid being duped. Pastors are not exempted from this menace. Victor Uzugbo, a vocal coach in a chat with The Guardian said, “ I was so delighted when Pastor Mrs. Faith Oyedepo chatted me up on face book to pray for me. It was a blessing, I thought, until she told me she wanted me to make a donation to a motherless babies, but with the account details of another man, I quickly unfollowed the account.”
Cyber Security Consultant, Adote Rock told The Guardian the realities of online fraud are harsh in the real business world, as it affects every sector of the economy that is represented online. “Banks usually face distributed Denial Of Service (DOS) attack, which could run down their server and also result in large number of compromised systems, some of the criminals call them to pay a certain amount in order to have their servers run again. Identity theft causes pandemonium when you find them on professional websites like linked-in. These criminals while pretending to be someone else connect with contacts of a professional with bogus experience to defraud them. Legitimate friends ad people without realization, they are about to be victims of on-line fraud.”
Continuing, he said, “In truth, Cyber fraud has grown beyond stealing money to hacking government database. An example is the alleged Chinese hack of the United States of America national security details, after an alleged attack by Russia. That is where the world is moving to because there is an over drive, that the currency of the new age is information.”
On the solution to online fraud he said, “ there is no single solution to end it. Financial institutions are most affected, and they have a role to play in scaling up their system, do more employees training. Businesses have been unable to stop ‘Bring Your Own Device (BYOD) system,’ which also puts business information at risk because employees use their device on company server, copy information to their personal devices neglecting the damage it can cause. For e-commerce, the encryption site used by some online stores are weak, which makes it possible for someone to use your information, and re-route it to your phone. The organisations responsible should ensure that their systems are scalable to match growing traffic on their website. According to Rock, some consumers have perceived some risk on their ATM details, as they now insist on pay on delivery. Customers should avoid putting personal details online as much as possible.”

Post a Comment