UBA, Zenith, GTB, others lost N12.2 billion to electronic fraud in six months

UBA, Zenith, GTB, others lost N12.2 billion to electronic fraud in six months

  • Interswitch has disclosed that in the first six months of 2023, Nigerian banks suffered huge losses due to electronic fraud
  • The company’s head of retail said most of the reported frauds were carried out through POS, web, and mobile platforms
  • She said 96.2% of electronic payment fraud was caused by corporate fraud

The banking sector lost N12.2 billion to electronic payment fraud in the first half of the year (H1 2023), Interswitch has revealed.

The digital commerce firm added that N14.3 billion of the N35 billion in attempted fraud recorded in 2022 was actually lost.

Suzan Fasipe, head of retail payments at Interswitch, disclosed this during the Techconnect 3.0 conference in Abuja.

electronic fraud
Head of retail payment at Interswitch said 58% of fraud losses in 2022, or N8.3 billion, were committed through POS, web, and mobile platforms. Photo Credit: Diy13, Rapeepong Puttakumwong
Source: Getty Images

Most frauds committed through POS, Web, mobile platforms

In a report, Fasipe said 58% of fraud losses in 2022, or N8.3 billion, were committed through POS as well as web and mobile platforms.

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According to her, 37% of banks were victims of ransomware attacks between 2021 and present.

Additionally, 93% of banking-related fraud, according to the company, was committed online.

Interswitch also said chargeback fraud could occasionally go unnoticed by banks for six months. This, it said, happens when a customer uses their own credit card to make an online transaction and then asks the issuing bank for a chargeback after obtaining the goods or services.

When a chargeback is accepted, the financial transaction is cancelled, and the consumer is reimbursed for their money.

Depending on the payment method used, the merchant may also be held responsible when a chargeback occurs.

Fasipe added that 96.2 percent of electronic payment fraud was caused by corporate fraud, which is the result of lax internal controls.

She added that in 2021, fraud involving their customers and workers cost four banks N1.77 billion.

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At the event, Fasipe gave useful insights on bolstering current solutions to reduce fraud events, protecting consumers' sensitive data, and navigating new market trends.

Stakeholders at the event examined financial inclusion initiatives and the crucial part regulators play in fostering digital financial inclusion.

The development draws attention to the growing security issues facing the banking sector as it works to strengthen the digital payment infrastructure.

Report had earlier pointed out that bank customers in Nigeria lost a total of N1.17 billion in the second quarter of 2022.

Also, a total of 12,553 cases of fraud and forgeries were reported in Nigeria's banking sector in the first three months (Q1) of 2023.

FG Warns As Fraudsters Develop New Methods To Hack Bank Customers’ Account in One Click

Legit.ng had reported warning by the Nigerian Deposit Insurance Corporation (NDIC), a Federal Government agency, over increased bank fraud cases.

The commission said bank customers should remain alert and prioritise the security of their tokens to protect their funds.

Source: Legit.ng

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