Rising cases of electronic frauds,
especially Automated Teller Machine-related scams, which have made
Deposit Money Banks to lose billions of naira in recent times, have
forced some of the lenders to prevent their payments cards from working
in the United States of America, China and a few other countries.
It was gathered that the banks took the
action following the huge amount they were spending in refunding
customers who had lost money in payment cards related frauds.
“A number of banks decided to deactivate
their payment cards from working in the USA, China and a few other
countries that are still using magnetic stripe instead of the chip and
PIN,” a top bank official familiar with the situation told our
correspondent on Sunday.
“The decision was caused by the rising
cases of fraudsters using cloned Nigerian ATM cards to make transactions
at shopping in malls in the USA and China,” he added.
Apart from fraudsters using cloned
payment cards issued by Nigerian banks to buy goods abroad, it was
gathered that some of the payment cards had also been used to withdraw
money from ATMs in foreign countries, especially in the US.
“This scam has been on for a very long
time but it has reduced drastically since some banks decided to
deactivate their payment cards from working overseas. However, what we
have done as a bank is to tell our customers to inform us whenever they
are travelling overseas so that we can activate their payment cards to
work overseas. Once they tell us, we will activate it,” the banker
explained.
According to the Central Bank of Nigeria statistics, banks lost N40bn to electronic frauds in 2013 alone.
However, findings by our correspondent
showed that prior to the recent deactivation of the payment cards from
working overseas, refunds made by banks to customers who were victims of
cards frauds were in excess of N1bn.
One of the ‘Systemically Important Banks’ made refunds in excess of N200m in 2014, a top official said.
The PUNCH had in August last year
exclusively reported that electronic fraudsters had been duplicating
payment cards belonging to Nigerian bank customers and using them to buy
items worth millions of dollars from shopping malls in the US.
It was gathered that the development had
made the Nigerian banks and their customers to be losing millions of
naira to the e-fraud.
The development had forced top executives
of the banks and senior officials of the CBN to meet with the Economic
and Financial Crimes Commission sometime last year.
Following the meeting, the EFCC was said
to have commenced the process of collaborating with sister agencies in
the US to effect the arrest of some of the fraudsters.
When contacted on Sunday about the
deactivation of payment cards from working overseas, the Chairman,
Committee of E-Banking Industry Heads, Mr. Tunde Kuponiyi, said banks
had deployed a number of technologies to stem the tide of electronic
frauds, including payment card related frauds.
He said millions of naira had been spent
to deploy the electronic payment technologies, adding that the rate of
e-frauds had gone down drastically in recent times following such moves.
He, however, was silent on whether some
banks had deactivated their payments cards from working overseas unless
informed by their customers travelling abroad.
The Chairman, Chartered Institute of
Bankers of Nigeria, Lagos State Branch, Mr. Abolade Agbola, had
emphasised the need for the CBN to fast-track the biometric registration
of bank customers as a way of checking electronic fraud.
He said, “There is no justification for
it (deactivation of ATM cards); and what that will do is that people
will limit the amount of money or specify the kind of account they
expose to online transactions.
“I think the CBN is also insisting that
when this issue has happened, it must be resolved speedily so that
confidence will not be lost. And that is one of the reasons why banks
will keep on changing their software to make it safer; and, of course,
that is also one of the reasons the issue of national identity card
needs to be fast-tracked, which is at the government level.”
The President, Institute of Chartered
Accountants of Nigeria, Mr. Chidi Ajaegbu, said the CBN had achieved a
lot in the cashless drive but there was a need to continue to build
public confidence in the electronic means of payments.
“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,” he said.
The General Manager, Visa West Africa, Mr. Ade Ashaye, noted that the type of card used in the US might be prone to fraud.
He, however, said the development could be mitigated by new technologies.
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