A report by the Nigeria Inter-Bank Settlement System (NIBSS) has revealed that financial institutions in Nigeria lost N52.26 billion to fraud in 2024.
This represents a significant increase of N34.59 billion compared to the N17.67 billion recorded in 2023.
The NIBSS reported that approximately N400 million was stolen by fraudsters through financial accounts opened with stolen identities in 2024.
It stated that the identities of senior citizens were stolen, and accounts were opened in their names and the estimated N400 million proceeds from fraud were transferred into these accounts and subsequently dissipated.
The report shows that the money lost to fraud increased by 196 per cent over the past five years, in parallel with the growth of financial transactions in the digital payments sector.
It also revealed that although the annual fraud count reported decreased by 31 per cent, from 101,624 in 2020 to 70,111 in 2024, the amount lost to fraud grew by 350 per cent, rising from N11.61 billion to N52.26 billion within the same period.
The NIBSS Fraud Report, which documents fraud activities, whether attempted or successful, and related metrics identified by local financial institutions or agencies, indicated that the ratio of total reported fraud value to the total value of transactions recorded over the last five years showed a decrease from 0.0053 per cent in 2020 to 0.0022 per cent in 2023, followed by an increase to 0.0040 per cent in 2024.
The report also revealed a 338 per cent increase in attempted fraud between 2023 and 2024, attributing the rise to system vulnerabilities at certain institutions. Compared to the previous quarter, fraud activity increased in 2024, with attempted amounts and actual losses rising significantly in Q2 and Q3 before declining in Q4.
In 2023, a total of 80,658 unique customers fell victim to fraud, which is 4 per cent less than the 84,130 customers recorded in 2022.
The NIBSS highlighted that this decline does not diminish the severity of the issue and urged the financial industry to remain vigilant, enhance security measures, and collaboratively address the persistent challenges posed by fraud.
According to NIBSS, individuals aged 40 and above continued to be the primary targets for fraudsters in 2023, mirroring the trend observed in the previous year, emphasising the need for ongoing efforts to educate and protect individuals in this demographic from fraudulent activities.
The report noted that certain regulations need thorough examination, modification, and reinforcement to reduce the potential for fraud and increase the chances of successful recovery.
On the accounts opened with stolen identities, the report showed that the accounts were operated by an individual from Asia whose selfie was used for verification, with locations showing as Hong Kong in at least three financial institutions.
The report, however, did not disclose the names of these institutions.
On July 30, 2024, a corporate account for an oil and gas company was opened using doctored documents and a registered company number picked from the internet. Supporting documents were also fabricated to open the accounts.
A total of N335 million from fraud proceeds was received on the same day the account was opened. The funds were then transferred to unlicensed Bureau De Change (BDC) operators in July 2024.
NIBSS, in collaboration with law enforcement, managed to recover all the funds, and an account officer was found with incriminating documents by the Economic and Financial Crimes Commission (EFCC).
The NIBSS Fraud Report also highlighted that over N1 billion was moved using two accounts after Bank Verification Numbers (BVNs) were registered for two minors by compromised bank staff.
An enterprise account was opened for the first minor using the BVN, receiving an estimated N495.3 million, which was later drawn down.
Similarly, a BVN was registered for the second minor by a compromised agent, and an enterprise account for a bakery was opened with the BVN, into which an estimated N507 million was transferred and subsequently moved out.
The report emphasised that the bank agent involved has been reported to law enforcement authorities for arrest, and engagement is ongoing with the bank regarding the role played by its staff in the fraud.
