Frustrations of e-Banking Fraud Victims

Sanusi Lamido Sanusi, CBN, governor
Sanusi Lamido Sanusi, CBN, governor

The tendency of most banks in Nigeria to push the causes of electronic banking to the carelessness of victims has forced many customers to shun electronic transactions in banks

By Anayo Ezugwu  |  Sep. 2, 2013 @ 01:00 GMT

WHEN Emmanuel Okpe, a public servant, opened a savings account with the United Bank for Africa, UBA, in 2006, it was essentially to save his money. But few years after, he finds it difficult to put money in any bank in the country. He said that in 2011, he lost N429,000 to Automated Teller Machine, ATM fraud.

“I have two accounts at the bank, one is a current and the other is savings. I have been using these two accounts since 2006. I have ATM cards on both of them so that I can have access to my accounts at any given time. It happened that I was trying to withdraw money from one of them on June 27, 2011, but I couldn’t. So, I kept on trying until the machine seized my card. The following day, I got a message from the bank to come and pick my card which I did. However, on July 4, 2011, somebody transferred N100, 000 from his account to another person’s account named Olufunmi Olusanya. Two days later, another N100, 000 was removed. It went on until the last N29, 000 was removed on July 14,” he said.

According to him, while all these were happening, he didn’t receive any alert from the bank as he usually does on any transaction. He said he didn’t touch his account after the machine seized his card until July 27 when he tried to confirm his statement of account after transferring money into it that he discovered all his money had gone. “I have complained to the bank severally since it happened but all I get from them is we are investigating it. I was hoping that the matter would be resolved on time so that I can use my money. But as it stands, the bank is only dragging the issue.”

Tochukwu Onyiuke, a legal practitioner, said of the over 1,000 internet banking fraud and Automated Teller Machines, ATM, scam cases his firm is handling, none of the banks involved has shown genuine interest in rendering assistance to the victims. He expressed dissatisfaction in the manner in which some banks have been handling reported fraud cases on internet banking and ATM.


Onyiuke said how fraudsters managed to get into people’s accounts through internet banking is a question banks should answer since the position of law says banks have a mandatory duty to protect customer’s funds. The legal practitioner said banks are to protect their customers’ money by ensuring that there is no manipulation on customers’ accounts or unauthorised withdrawal. In the event that a customer loses money, or occasions that the bank fails to protect the fund, the customer can bring a legal action of a breach of contract against the bank. “Banks in Nigeria are fond of pushing blames to the customers even before investigating. Banks always claim that the customers compromised their passwords. But most times, we have discovered through investigations, that the claims were false,” he said.

Tunde Ogunsakin, commissioner of police in charge of the special fraud unit, Lagos, said that failure of banks and other financial institutions to follow due process in employing their staff is the root cause of frauds in the sector. He said that the financial institutions’ carelessness in properly screening applicants before employment often results in insiders’ connection in most fraud cases that had been investigated by his unit.

“In recent times, electronic banking fraud has taken the lead in all manners of bank frauds in Nigeria. The reason for this is not far-fetched. In a world where information technology has become a veritable foundation of modern- day-banking in a cashless environment, it is quite natural for fraudsters to devise their own criminal means to circumvent the system. The ambivalence of measures put in place by government regulators for the commercial banks/players to guarantee security of access and terminals which provide tools for e-products delivery notwithstanding, the fraudsters are always relentless to thwart these efforts. This fact is underpinned by regularly reported cases at the police special fraud unit involving frauds perpetrated through automated teller machines, ATM, mobile telephony banking, internet banking, electronic, (wire) instruction transfer of funds, point of sales, POS and banking and credit/debit cards scheme. The commonest among electronic banking fraud is the money transfer (wire) instruction schemes, where either the bank customers account passwords are either stolen or hacked into, or where the security pass codes of bank officials are compromised through the bank’s electronic platform, which is then illegally intruded upon by fraudsters,” he said.

Meanwhile, First Bank of Nigeria has selected Clydestone’s G-secure Authentication Platform to drive its internet banking and prevent fraud-related cases. The initiative is in line with global best practices and with the mandate of the Central Bank of Nigeria, CBN, which stipulated that all banks should ensure integration of payer authentication.

Folake Ani-Mumuney, First Bank’s spokesperson, said the selection of G-secure Authentication Platform has further improved the bank’s fraud prevention platform with robust security protocols, which enable customers to enjoy secure, convenient and reliable online shopping. She said the bank remains resolute in its quest for continuous investment in information technology to deliver innovative products and ensure protection of customer funds across the bank’s service platforms. “With this development, our web merchants can easily validate shoppers on their websites to ensure that the shopper is the true cardholder performing the transaction. As regulators and operators continue to guard against cybercrimes in the sector, this is another demonstration of our commitment to providing the best possible financial services and security to over seven million First Bank customers across the globe,” she said.

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