Fraudulent Scheme Leads to Theft of N329 Million Through BVN Manipulation

A report by the NIBSS reveals fraudsters have stolen N329 million through fraudulent registrations using static images for Bank Verification Numbers in Nigeria. Dishonest agents registered fake BVNs linked to bogus accounts, resulting in substantial financial losses. Despite a decrease in reported fraud cases, the overall financial impact of fraud has significantly increased, necessitating enhanced measures by financial institutions to report fraudulent activities.

Fraudsters have illicitly obtained N329 million by utilizing static images to enroll in Bank Verification Numbers (BVN), as revealed in a recent report by the Nigeria Inter-Bank Settlement System (NIBSS). The report highlights alarming trends in financial fraud in Nigeria, detailing how dishonest BVN enrollment agents contributed to this scheme by registering still images of both Nigerian and foreign individuals as live enrollees.

These fraudulent BVNs were subsequently used to establish fake accounts across various microfinance banks, mobile money operators, and payment service banks. The deceitful operation resulted in transactions involving N329 million merely days after the creation of the bogus accounts linked to these BVNs. Investigations indicated that many fraudulent BVNs were assigned typical Nigerian names, complicating efforts to identify fraud during the enrollment process.

The NIBSS report notes the removal of numerous fraudulently established BVNs, and the involved agents have been reported to law enforcement authorities for potential arrest and prosecution. The report states, “Still images of Asians and Nigerians are taken and enrolled for BVN by recalcitrant agents. Accounts are opened with these BVNs in MFBs, MMOs, and PSBs.” Furthermore, “An estimated N329m being proceeds of fraud was received into some of the accounts opened with the BVN generated with these still images a few days before the fraud.”

The NIBSS also highlighted that the total losses attributed to fraud reached N52.26 billion in 2024, marking a staggering 350 percent increase from N11.61 billion recorded in 2020. Despite this surge in financial losses, the number of reported fraud cases decreased by 31 percent, declining from 101,624 in 2020 to 70,111 in 2024. The increase in fraud losses has been ascribed to the emergence of sophisticated fraudulent schemes and vulnerabilities within systems.

Attempted fraudulent transactions in 2024 amounted to N86.36 billion, with actual losses increasing by 195 percent compared to 2023. In response to rising fraudulent BVN activities, the Central Bank of Nigeria has mandated that financial institutions report any fraudulent BVNs to NIBSS within 24 hours of detection.

In conclusion, the NIBSS report highlights a concerning trend in financial fraud in Nigeria, particularly related to the fraudulent enrollment of Bank Verification Numbers through static images. The alarming financial implications, which resulted in losses exceeding N52 billion, underscore the need for strict scrutiny of enrollment processes and prompt reporting mechanisms by financial institutions. The involvement of law enforcement to address these fraudulent activities is equally critical to safeguarding the integrity of the financial sector.

Original Source: punchng.com