Banks battle rising fraud on electronic transfer platforms

Banks have started introducing new measures to battle with a new wave of fraud on their electronic transfer platforms.

Vanguard investigations revealed that some banks now require that customers issue cheque as part of requirements for using their electronic instant transfer platform to transfer money to customers of other banks. The customer will first issue a cheque to the bank, which would be attached to the transfer form filled by the customers.

Further investigations revealed that this measure was prompted by cases of customers’ complaint of electronic money transfer from their accounts, which they did not authorise.

“There were cases whereby customers would fill form for electronic money transfer, only to come back to deny ever authorising such transfer”, a bank staff told Vanguard on condition of anonymity.

Investigations revealed that the situation was so severe in an old generation top five bank that it has to shut down its own electronic transfer platform for days. In addition, some banks suspended instant electronic money transfer services to customers of banks considered to be very prone to such fraud.

A report presented at one of the monthly meetings of the Nigeria Electronic Fraud Forum (NEFF) indicate that fraudsters have created ways of infiltrating electronic transfer platform of banks to make fraudulent withdrawals from customers’ account. The report however said that this was made possible by banks’ staffs who agree to collaborate with the fraudsters. But investigations show that some customers have devised means of using the electronic platforms to defraud banks.

The situation however is been aggravated by the confidential approach of banks to incidences of fraud. According to a staff, whenever such incidence arises, the customer is allowed to go, while the staff is made to bear the consequence.

This is despite threat of sanction from  NEFF over inaccurate reporting of fraud incidence.

Speaking at the August monthly meeting Forum,  Chairman of the Forum, Mr Emmanuel Obaigbonna said many banks are not giving accurate report of fraud cases because they see it as de-marketing but doing so is saving the industry.

He said by giving accurate report of fraud cases banks will help their colleagues to learn from their experience and this will go a long way in reducing fraud in the industry. He said this is in line with the aim of the Forum, which is to be proactive in the fight against electronic fraud, by nipping in the bud likely fraud attempt before they occur. “Our aim is to have a centralised data base for fraud incidences, review such incidences to learn from them to make sure they don’t reoccur”, he said.

Obaigbonna said that the Forum will soon introduce sanctions to compel banks to make accurate report on fraud incidences. “We have set up a subcommittee to look into the issues of sanctions for inaccurate reporting,” he said.

He said in addition to introducing sanctions, the Forum is working with the Nigeria Interbank Settlement System to change the reporting format for electronic fraud by banks.