7 August 2017

Nigeria: CBN, NCC to Tackle SIM Swap, USSD e-Payment Frauds

Lagos — The Central Bank of Nigeria, CBN, in collaboration with the Nigerian Communication Commission, NCC, is set to introduce regulations to curb SIM swap and Unstructured Supplementary Service Data,USSD, related electronic payment frauds in the financial system of the nation.

Director, Banking and Payment System Department, CBN, Mr. Dipo Fatokun, disclosed this, weekend, in Lagos at a bi-monthly forum of the Finance Correspondents Association of Nigeria, FICAN.

Speaking on "Electronic payment industry performance and regulatory issues," Fatokun said the CBN is aware that fraudsters are exploiting the SIM swap process and USSD to defraud people, adding this would soon be a thing of the past.

He said: "Some of the fraud we are still battling with is the issue of SIM swap. We had an investigation recently and we discover that one particular fraudster, which we discovered through the help of NCC, has been using SIM swap and USSD to collect people's money and using the money to recharge his phone. We hope that before the end of the year the issue of SIM swap and USSD frauds would be a dead issue.

"We have heard of instances where people would say for three days my phone did not work. And because many of us carry more than one phone, if one is not working, at least one will work.

"So, what they do is that they swap your phone. That is, they just walk up to a service provider and claim to be the owner of the line. Most often, they have studied that number and they have collaborators, probably in the bank.

"And because the process for doing a change of SIM card is so loose, the telcom company would change the SIM card for the person and so he assumes the phone number.

"What does he do? He puts the SIM card in another phone and start using the USSD to make transfers out of the account into another account. So, we are working with the NCC to tighten the process of SIM card swap. It may include biometrics and a unique number may be required.

"In Nigeria, we have consistently over the last three years reduced the value of electronic fraud. The game changer is the Bank Verification Number, BVN. It is not only helping us to identify who owns what, but going forward."

"When electronic fraud happens, money is moved from one account to another account. That other account that money is moved to, the owner can be identified. And when such owners can be identified, they can be blacklisted or watch listed.

"It means that fraudsters can be identified and if possible taken out of the system. So, the BVN is going to be a game changer in the respect. We are working on the final framework and when it is concluded, it would be issued to the industry."


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