Facts emerged on Tuesday that electronic
fraudsters had been duplicating Automated Teller
Machine cards belonging to Nigerian bank
customers and using them to buy items worth
millions of dollars from shopping malls in the
United States.
Top officials of the Central Bank of Nigeria told our
correspondent that the development had made
Nigerian banks and their customers to be losing
millions of naira to the e-fraud.
The development, it was learnt, had become so
overwhelming and that top executives of the banks
and senior officials of the CBN had to meet with a
team of Economic and Financial Crimes Commission
operatives led by the director of operations in
Abuja on Tuesday.
According to sources close to the meeting, the
banks are seeking the assistance of the anti-graft
agency to help in arresting some of the fraudsters
who are using the duplicated ATM cards in the US.
From the outcome of the meeting, the EFCC is set
to collaborate with a sister agency in the US in
order to effect the arrest of some of the electronic
fraudsters.
The source disclosed, “Banks have been losing a lot
of money to electronic fraudster cartels who are
using customers’ ATM cards to fraudulently buy
items across shopping malls in the US.
“Normally, customers should bear the loss but
because banks don’t want the issue to come to the
public so that the use of ATM cards will not be
discouraged, they settle those customers by paying
the money.”
Asked how the Nigerian ATM cards are being
duplicated and used in the US, a source close to
the development explained, “In Nigeria, we use chip
and PIN, but the US still uses magnetic stripe. So,
what those fraudsters do is to get the details of a
customers’ ATM card, duplicate it and then go to
shopping malls and start using it to buy items.
“When they are using the PoS in US shopping malls,
all they do is to swipe the card and then payment is
made. They don’t need to put any PIN. Through
these, items are bought using Nigerian ATM cards.”
An EFCC source, who spoke under the condition of
anonymity, confirmed the meeting and noted the
anti-graft agency was set to work with the US
government to arrest the fraudsters.
A top official in one of the top banks said the
incidence of electronic frauds had been on the
increase and the development was a source of
worry to bank executives.
It was learnt that most of the frauds were being
perpetrated in connivance with some bank officials.
The official recalled that prior to 2010 when
Nigerian banks were still using magnetic stripe for
ATM cards; the issue of using Nigerian ATM cards
fraudulently abroad was prevalent.
However, when the banking sector migrated to the
chip and PIN system, the problem stopped.
“However, the frauds have started again now in a
new form of Nigerian ATM cards being duplicated
and used abroad. The incidence is becoming very
high now and something has to be done urgently to
arrest the trend,” the banker added.
Analysts have said that the increasing incidence of
electronic frauds may affect the growth of the cash-
less Nigeria initiative.
The Deputy Governor, Corporate Services, CBN, Mr.
Adebayo Adelabu, recently said at a conference that
the incidence of fraud involving bank officials had
been on the increase.
Adelabu, who is a former Executive Director of First
Bank of Nigeria, linked the increasing frauds in the
banking sector to several issues, including the
banks’ poor recruitment procedures and failure to
prosecute workers involved in fraudulent activities
for fear of reputational risk.
The Chairman, Chartered Institute of Bankers of
Nigeria, Lagos branch, Mr. Abolade Agbola, linked
the high incidence of electronic frauds to lack of
integrity and poor staff conditions in the banking
sector.
“When you see the fraud that happens and the
trillions of transactions that take place daily, then I
think the banks have to take the technology ahead,
take the staffing ahead and then create a future for
the members of staff so that they can know that
they have a future in the organisations and that
they can build a future,” he said.
www.punchng.com/business/business-economy/fraudsters-shop-abroad-with-cloned-nigerian-atm-cards/