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Bank Staff Culpable in 3.6 Billion Fraud in Q3 22

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CEM REPORT, FINANCE | Fraudulent activities carried out by banking institutions staff in the country increased by 250 per cent in the third quarter of 2022 (Q3’22).

Automated Teller Machines (ATMs); Point of Sales (PoS) machines, mobile, other electronic channels and cash accounted for about N3.62 billion of fraudulent activities/transaction within the quarter.

According to a recently published report by FITC on Frauds and Forgeries in Nigerian Banks’ Q3, 2022, fraud cases fell by 4.36 per cent from 20,195 witnessed in Q3’21 to 19,314 cases n Q3’22.

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While the total amount report dropped from N34.8 billion to N9.62 billion, a fall by 72.34 per cent, the total amount lost in the same period in 2021 was N853,167,293.61  against N3.62 billion in Q3, 2022, representing an increase of 324.50 per cent.

Personnel Involvement

The report stated that bank personnel carried out all cash theft cases reported within the period.

According to FITC, bank personnel (insider) involvement in fraudulent activities increased from 32 in Q3, 2021 to 112 in Q3, 2022, a significant 250 per cent increase.

Similarly, outsider involvement in the reported fraud cases increased by 324.50 per cent, moving from 14,243 in Q3, 2021 to 16,125 a year after,

Furthermore, 22 tellering fraud was reported in the period under review, which involved four bank staff and five outsiders with 10 people colluding, involving N121,763,258.91, with an actual loss put at N83.5 million.

Also the report adds that 36 forged cheques and signatures were reported with the involvement of four bank staff and 12 outside persons, where N521,349,800.96 was involved but N305.4 million was lost.

Electronic Fraud

FITC reports that 8830 case of fraud was reported involving six bank staff involved and 8911 outsiders worth N2,621,953,247.60 and recording N305, 495,175.25 loss.

Fraudulent mobile transaction stood at 6631 cases worth N2,669,417,856.44, recording N1,222, 095,081.99 as loss ln the review quarter

Banking staffs reported on mobile fraudulent transactions were 33 while 5194 persons from outside colluded.

Cash Theft

N452.2 million was stolen involving 16 bank staff in 16 cases.

Within this period, 14 appointments were terminated in Q3, 2021 while 20 bank staff were relieved of their duties a year after.

On the bright side the report details that within the review quarter there was no clearing fraud, printing of bank documents illegally; falsification of accounts; foreign exchange fraud and cross firing of cheques and kite flying.

What FITC is saying

While commending the banking institution on it efforts to curb fraudulent activities within its system, it call on the institution to improve internal control measures so that fraud activities are proactively prevented.

FITC said there is a need to review fraud control measures in place in the physical bank branches as there was a sustained increase in the amount involved in fraud activities and ultimately the increase in the amount lost in the bank branches.

They added that “As always, banks should continue the ongoing sensitization of their customers on the need to protect their personal details across various channels and banking platforms.”

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