The Deputy-Director of Department of State Service (DSS) Mr. Yekini Ishola has warned Internet fraud in Nigeria is more prevalent in the south west, especially Lagos, Ogun and Oyo.
Mr.Yekini Ishola made this disclosure while presenting a paper on cybercrimes and the way out at a two-day annual security seminar organised by the Security Department of Nnamdi Azikiwe University Awka.
Decrying the spate of cybercrime among Nigerian youth, particularly in the Tertiary Institutions, the DSS Chief subsequently submitted that Ladoke Akinola University is presently considered has having the highest concentration of cyber criminals.
Cybercrimes are not committed by an individual, but by a network of criminals. Mr. Yekini reiterated. He later warned that activities perpetrated by these syndicates include using identity theft, hacking, malicious software and other fraudulent methods to gain access into personal information and account details of unsuspecting owners.
Customers who have their card issued by a Deposit Money Bank (DMB) in Nigeria may be expected to pay at least $6.00 (1000.00 NGN) each time their card got trapped in the ATM; this move has become necessary given Central Bank of Nigeria (CBN) new guideline on Card Issuance and usage.
The CBN guideline read, “Any trapped card in the ATM shall be rendered unusable (by perforation) by the acquirer and returned to the issuer on the next working day”. Explaining the rational for the new guideline, the Director, Banking and Payment System Department, Mr. Dipo Fatokun alluded this is meant to augment non-disclosure on cardholder information to the minimum.
Fatokun explained- if information such as the Primary Account Number (PAN) is disclosed, it could be used for Card Not Present’ transactions. Card Not Present transaction normally happen over the web in which case you only need the information on the card (PAN) and don’t need the PIN (PAN is the sixteen digits information displayed on the customer card).
Some of our DMB sources has however asserted this move may be retrogressive as most banks now have Securecode (Mandatory second factor authentication other than the PAN) enabled for their CNP transactions.
A release from the Nigeria Deposit Insurance Corporation (NDIC) reveals fraud figures is on the rise within Deposit Money Banks in Nigeria. According to the NDIC report, the banking sector recorded a total of 3,380 cases in 2012 alone, with ATM Fraud topping the list. Other fraud sources include those perpetuated through Internet Transfer/Withdrawals, and suppression of customer deposit.
Further to the Federal Government’s repeal of the Evidence Act, Cap. E14, Laws of the Federation of Nigeria, and subsequent enacting of a new Evidence Act, 2011, the National Information Technology Development Agency (NITDA) called a National Technical Committee (NTC) meeting to address the implementation of the amended FG act.
The NTC meeting took place Wednesday, 30th April 2014 at the Tinapa Business Resort Calabar, with delegates from the EFCC, Nigerian Police, Nigerian Army, NDLA, Judiciary, and Deposit Money Banks in attendance.
The objectives of the National Technical Committee (NTC) meeting are as follows:
To develop the Standards for the implementation of digital and computer forensics in Nigeria in terms of electronic evidence acquisition, examination, analysis and presentation in a manner that will be admissible in the law courts;
To develop standards for: (a) forensic laboratories where admissible forensic evidence could be extracted; and (b) develop standards for the quality of forensic laboratory staff
Giving the increasing volume of electronic payment transaction in the Nigerian Sector, a pertinent question to ask is who bears the risk in the event of Card Not Present (CNP) fraud- Is it the customer, the card issuer or the merchant?
In its simplest form CNP fraud involves the unauthorized use of a customer card details to purchase product or service from a merchant in a non-face-to-face setting. What usually happens is the merchant never physically inspects the card used for transaction, thus the term “card not present” applies. The transaction happens over a merchant website or through the phone/email purchase order, the merchant subsequently release the goods or render service with the understanding that the customer authorized the purchase and will make the required payments.
In a card not present transaction, typically, the customer information used to perpetuate the fraud includes the card number, the card verification code, and the expiration date all of which are printed on the physical card. In most cases the PIN which is known secretly by the customer is not used.
So who bears the brunt in the event of fraud?
Generally, if a merchant accepts a card for a purchase and the card is physically present, the liability for loss fall on the card issuing financial institution, not the merchant; however, under Card Association rules of most developed economies (US inclusive), the risk of loss falls on the merchant. The implication of this is that the full value of a purchase will be charged back to the merchant if the transaction turns out to be a fraud.
Fraudulent transaction trough Card Not Present transaction seems to be on the rise. A reliable source reveals that 62 percent of the bank in Nigeria has recorded this type of customer fraud claims in the last three years.
The Central Bank of Nigeria (CBN) has concluded plans to launch a portal solely dedicated for reports of frauds arising from the use of all the electronic payment channels in the country. The initiative, which was in furtherance of the apex bank’s drive to ensure safe, reliable and efficient payment system in Nigeria, was also pioneered alongside the Nigeria Electronic Fraud Forum (NeFF) and the Nigeria Inter-Bank Settlement System (NIBSS) click here to read more… (source: ThisDay 11 July 2013).
It has been disclosed that 513 Financial Institution staff were involved in aiding and abetting fraudulent transactions in 2012. Figured released shows- temporary staff constituted 42.46% of the staff involved in the frauds. Clerks and cashiers accounted for 22.03%, officers 16.76% and supervisors and managers 14.69%, while typists, technicians and stenographers were 0.94%.
In the communique presented by the Nigeria Deposit Insurance Corporation (NDIC), the body presented a 6% increase compared to previous year 2011. The major causes of fraud can be grouped into institutional and environmental factors, the body disclosed. Institutional causes include weak internal control system, uncompetitive remuneration, and lack of implementation or partial disregard of the ‘Know Your Customers’ (KYC) rules. Environmental factors include societal demands, low moral values, lack of effective deterrent and punishment, reluctance on the part of the individual banks to report fraud cases.