9 July 2014

Nigeria: Fraud Cases in Banks Up By 80 Percent

The number of reported cases of fraud and forgery in the banking industry has increased from 2,527 in 2011 to 4,527 cases in 2012 representing a rise of 79 per cent. The amount of money involved in the crime stood at N14.8 billion and US$1.6 million in 2012 compared to the sum of N29.5 billion recorded as at the end of the previous year.

However, the actual loss to banks fell by 26.1 per cent to N4.27 billion and US$0.4 million in 2012, from N5.78 billion at end of December 2011.

The Central Bank of Nigeria (CBN) in its 2012 annual report said, the cases of fraud were perpetrated mostly by outsiders and some bank staff, "through such means as pilfering, theft, suppression and conversion of customers' deposits, illegal funds transfer and fraudulent ATM withdrawals".

On consumer protection, the apex bank said the cumulative total number of consumer complaints in its database stood at 2,390 at the end of December 2012, out of which 470 or 19.7 per cent had been resolved, while the remaining cases were at various stages of the resolution process.

The cumulative total value of unverified claims arising from consumer complaints since the inception of the consumer complaints desk was N332.65 billion, while the value of verified claims stood at N13.9 billion. Actual refunds by the DMBs stood at N7.96 billion.

On use of e-money products, it said, the volume and value of electronic card (e-card) transactions increased from 355,252,401 and N1,671.4 billion in 2011 to 382,616,953 and N2,095.7 billion in 2012, reflecting an increase of 7.7 and 25.4 per cent, respectively.

The increase was attributed to enhanced public confidence in electronic card payments.

Data on various e-payment channels for the period under review indicated that automated teller machines (ATMs) remained the most patronised, accounting for 98.1 per cent, followed by point-of-sale (PoS) terminals at 0.7 per cent. Web and mobile payments accounted for 0.6 per cent each.

Similarly, in value terms, ATM accounted for 94.7 per cent, PoS 2.3 per cent, web and mobile payments, 1.5 per cent each.

According to the report, the volume and value of ATM transactions amounted to 375,487,756 and N1,984.65 billion, in 2012, respectively. These reflected an increase of 8.1 and 27.1 per cent over the volume and value of 347,569,999 and N1,561.75 billion, respectively, in 2011.

The volume of mobile payments decreased by 37.0 per cent to 2,297,688 in 2012, from

3,649,374 in 2011, while the value increased by 65.8 per cent to N31.50 billion in 2012, from N19.0 billion, in 2011.

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