Fraudsters Steal N329M Through Misuse of Static Images in BVN Enrollment
A report by the Nigeria Inter-Bank Settlement System has revealed that fraudsters used static images to illegally register Bank Verification Numbers, resulting in a loss of N329 million. Despite the overall decrease in reported fraud cases, financial losses surged significantly. The Central Bank of Nigeria is responding with mandated reporting measures to address this issue.
Fraudsters have exploited static images to misregister for Bank Verification Numbers (BVNs), resulting in an alarming loss of N329 million. This information was revealed in a report by the Nigeria Inter-Bank Settlement System, which details new fraudulent trends affecting Nigeria’s financial sector.
The report noted that certain unethical BVN enrollment agents participated in this fraudulent activity by registering images of both Nigerians and foreigners as live enrollees. These online identities were subsequently utilized to establish fake bank accounts across various microfinance and payment service banks.
Crucially, transactions involving the N329 million occurred shortly after the fraudulent BVNs were activated and the accounts were set up. Investigations revealed that these static images were often counterfeited with Nigerian names, complicating the detection of illicit activity during the enrollment process.
Following these revelations, a number of fraudulent BVNs have been deleted, and the associated agents have been referred to law enforcement for arrest and prosecution. The report specifically stated, “Still images of Asians and Nigerians are taken and enrolled for BVN by recalcitrant agents. Accounts are opened with these BVNs in MFBs, MMOs, and PSBs.”
The financial losses attributed to fraud within the 2024 period surged to N52.26 billion, marking a staggering 350% rise from the N11.61 billion recorded in 2020. Despite this significant spike in loss amounts, the overall number of fraud cases reported has decreased by 31% during the same period.
The report highlighted that the soaring fraud losses are primarily due to increasingly sophisticated fraud tactics, existing system vulnerabilities, and rising incidents of high-value fraud. In 2024, attempted fraudulent transactions are estimated to reach N86.36 billion, showcasing a 195% rise in actual losses compared to 2023.
In a bid to mitigate fraudulent BVN activities, the Central Bank of Nigeria has set forth a directive for financial institutions to promptly report any fraudulent BVNs to NIBSS within a 24-hour timeframe upon identification.
The fraudulent use of static images to generate Bank Verification Numbers has led to significant financial losses in Nigeria, totaling N329 million. The NIBSS report indicates an alarming trend of escalating fraud losses, prompting the Central Bank of Nigeria to implement stricter reporting measures. Additionally, the report illustrates the need for enhanced security and monitoring within financial institutions to combat sophisticated fraud schemes.
Original Source: punchng.com
