• Experts call for tougher regulations

By YUSUF MOHAMMED

Many Nigerians do not trust electronic banking due to many of stories of fraud associated with it. The world has gone digital and the banking industry is not left behind. Several years ago, everyone irrespective of societal status had to walk into a banking hall for any kind of financial transaction.

The Central Bank of Nigeria, CBN, had initiated the policy of cashless society as part of the framework to get more Nigerians into the banking system as well as improve service delivery by reducing both the number of people entering the banking hall and transaction time.

Banks in the country were mandated to develop digital platforms to facilitate transactions, and key aspect of this is digital banking. Cash deposit, cash withdrawal, transfer and the rest use to be done manually through physical interface between the customer and the bank.

Today, the case is different with technological advancement. With a mobile phone in your hand, you can do almost all financial transactions as long as you have any of the banking apps. Banks in Nigeria recognized the potentials of information and communication technology and now offer automated teller machine (ATM) services, internet banking services, telephone banking services, credit card services.

Aside from having the banks apps there are also codes. For instance, GTBank has a code 737.

In fact it was the first bank that came up with a code for the mobile phone. They had a colourful advertisement on television that ran for months. That advert made many people aware of it. Other banks soon followed suit.

However, there are a few things you cannot do online. One of them is paying money into your account and withdrawing from your account. For that transaction, one has to be at the bank physically. How are people adjusting to it?

Some bank customers who describe themselves as “old school” say they are not into it. Some of them make use of a few of the products though.

“I know it makes business faster but I don’t trust it. I just feel it exposes me to fraud,” Mr Hafeez Bukunmi a man in his early 50’s said.

Many people feel it exposes them to fraud. Is this possible? What are some of the information needed for anyone to be defrauded? What should customers be weary of?

The fear of fraud seems however, to be well founded. Cases of customers who are losing money from their accounts have been on the rise. Just last week, the NDIC disclosed that the rate of electronic bank fraud rose from N11 billion to N15 billion in 2018, as banks agonise over their vulnerability.

According to one IT manager of a major bank said that the greatest challenge facing them is the threat of internet hackers who break into customers accounts and move money. “Now the fear of hackers is the beginning of wisdom”, he lamented.

Like Bukunmi, many other Nigerians are sceptical about electronic banking. They do not trust the system due to the various stories of fraud associated with it.

One of such stories is that of Ms Idongesit Umoh, an entrepreneur.  On June 8, 2017, fraudsters cleared N2.1m within 30 minutes from her account. She runs a small scale business, which manufactures and retails hand-made footwear and accessories using genuine leather and Africa fabrics for men, women and children.  Her business has won several awards and recognition from several multinationals.

Early in 2017, she was shortlisted as one of the 101 outstanding young leaders in Nigeria by the Mandela Washington Fellowship to undergo six-week training in the United States.

On June 7, Umoh transferred N1.5m from one of her business bank accounts to her personal bank account to buy her Personal Travel Allowance for the journey. The next day, she wanted to refund a customer who had been debited twice while using her bank’s Point of Sale machine during the Lagos Leather Fair held the weekend before.

She typed in her bank’s mobile app password and received an error message, saying the credentials she typed were invalid. She tried it again and it repeated the same thing.

Immediately, she called the customer service number, explaining to the woman who answered what the problem was. The customer service representative told her to reactivate her app. She did that and the app requested for her PIN. She put her PIN and it said it was invalid again.

Umoh said she explained this to the customer service representative who was still on the call with her and she advised her to visit the bank.

Barely five minutes after the call she started to receive text messages of debit alerts from her bank with strange names. Immediately, it occurred to her that her account had been hacked into. She quickly called the customers service, while rushing to the bank.

She was at the bank when the debit alerts of the money being withdrawn were still buzzing and she screamed at the customer service lady that all her money was gone and that her accounts should be blocked at once. Her account had been cleared of approximately N2.1m within 30 minutes.

Since June, she said had been going back and forth with the bank over this issue.

BusinessHallmark gathered that in July that year, the bank succeeded in recovering and refunding N668, 000. However, the story of her life and business venture has never remained the same. She is currently in court with the bank over the issue.

Umoh stated, “Just about three weeks ago, I decided to wake up from my depression. I got myself back after the advice and encouragement from my dear friends and few customers who were aware of the unfortunate incident. Here I am, barely starting a business and already in court fighting with a bank. I would appreciate anyone who has ideas on how SMEs like mine can be saved from total collapse after going through such a shock and setback.”

Mrs. Comfort Ashaye, a pensioner had a similar experience. She lost her entire savings of N572, 000 to fraudsters after her pension had been paid to Diamond Bank.

It was gathered that Ashaye went to complain at one of the branches of the bank opposite Motorways Plaza in the Toll Gate area of Ikeja, Lagos but she got no refund.

Ms Ada Ann, who is based in Abuja also narrated her ordeal in the hands of fraudsters as a result of electronic banking. The business woman, who runs a boutique in Abuja called ‘A Cube Boutique,’ said that she was duped of N4.2m in 2014.

“Bad things are not supposed to happen to good people, right? Yes, but my case is unfortunately different. I am asking why this kind of fate should befall me now, losing all the savings I ever worked for,” Ann said.

A security guard at Adeniyi Jones who simply identifies himself as Ugochukwu said someone transferred the sum of N80, 000 from his account to another account. Efforts to trace the money have proved abortive.

Speaking to BusinessHallmark, he said, “I don’t know much about online banking. Someone transferred all the savings in my account to another account. I just woke up one morning and saw debit alert on my phone.  I have complained to my bank but nothing has been done.”

Electronic fraud is the major reason why a number of Nigerians do not want to be part of e-banking. Financial technology experts say banks and financial institutions remain the unabated target of cybercriminals in the last decade. E-fraud is now seen as a business risk rather than a technical risk.

Financial gain is still the major motivation behind most cybercriminal activities and there is little chance of this changing in the near future.

Cybercrime is simply defined as an economic offence committed using the computer and Internet as a medium, source, instrument, target, or place of a crime. The various fraud cases narrated involve payment cards, the USSD (using telephone lines of customers), and ATM-related fraud.

The President, Institute of Chartered Accountants of Nigeria, Mr. Chidi Ajaegbu, says the CBN has achieved a lot in the cashless drive but there is a need to continue to build public confidence in the electronic system of payment.

He says, “If we are striving to become a 24-hour economy, then we must have the necessary controls in place to build people’s confidence in the cashless policy we are driving. And part of this is making sure that people believe that their liquid assets and details are secure. It is the key to the 24-hour economy we are driving towards.

“What they do in other jurisdictions is that when they notice any perceived infraction, they descend on it heavily. And I think this is one of the things we need to adopt here. We should let people know that you can do every other thing but we can’t let you mess around with our cashless system. It is going to go a long way to help our economy.”

 

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