A brand new report by the Nigeria Inter-Financial institution Settlement System (NIBSS) has revealed that fraudsters exploited weaknesses within the banking system to steal over N1 billion utilizing Financial institution Verification Numbers (BVNs) illegally registered for minors.
The report revealed a rising development of economic fraud, with compromised financial institution officers and brokers facilitating the unlawful registration of BVNs for underaged people. These BVNs had been then used to open enterprise accounts, by means of which fraudulent transactions had been carried out.
The NIBSS report, which detailed two main circumstances the place BVNs had been fraudulently created for minors, resulting in vital monetary losses, disclosed that in a single occasion, a compromised financial institution workers registered a BVN for a minor and opened an enterprise account, which later obtained N495.3 million. The funds had been swiftly withdrawn.
In one other case, a corrupt banking agent enrolled a BVN for a minor and opened a enterprise account below the title of a bakery. The fraudulent account obtained N507 million, which was instantly transferred earlier than authorities might intervene. Each circumstances resulted in losses exceeding N1.002 billion, with funds rapidly moved by means of a number of accounts to evade detection.
The NIBSS report additionally implicated monetary establishment staff in facilitating these fraudulent actions.
Based on it, a financial institution workers member was immediately linked to at least one case, whereas an agent concerned within the second case has been reported to regulation enforcement for potential prosecution.
Regulatory our bodies are working with the affected financial institution to evaluate inside complicity and implement stricter verification measures to stop related incidents, the report added.
Regardless of a 31 p.c drop in reported fraud incidents between 2020 and 2024, monetary losses from fraud surged by 350 p.c, rising from N11.61 billion in 2020 to N52.26 billion in 2024. Fraudsters are exploiting regulatory loopholes, weak identification verification processes, and corrupt intermediaries to hold out monetary crimes.
The NIBSS report additionally recognized different fraud schemes, together with identification theft of senior residents, with fraudsters utilizing their particulars to open financial institution accounts and funnel over N400 million. It additional uncovered circumstances the place fraudulent company accounts had been created, reminiscent of an oil and gasoline firm that obtained N335 million on its opening day.
Moreover, criminals have been utilizing cryptocurrency transactions disguised as present card purchases to launder fraud proceeds, making it more durable for authorities to trace stolen funds.
To forestall future fraud, NIBSS has advisable stricter BVN registration processes, real-time biometric validation, and the implementation of an Enterprise Fraud Administration System to flag suspicious transactions.
It additionally known as for fraudulent BVNs to be blacklisted and for all newly opened monetary accounts to be profiled inside 24 hours to enhance fraud detection and enforcement.
The report additional urged authorities businesses and anti-fraud models to take swift motion to safeguard Nigeria’s monetary system from additional exploitation.
