Fraudsters Misuse Images to Steal N329 Million through BVN Fraud in Nigeria

Fraudsters have misappropriated N329 million by registering static images for Bank Verification Numbers (BVN) in Nigeria, as reported by the Nigeria Inter-Bank Settlement System. Despite a decrease in reported fraud cases, the overall losses surged significantly, necessitating stricter enforcement measures. The Central Bank has mandated timely reporting of identified fraudulent BVNs to combat these activities.

Fraudsters have exploited the Bank Verification Number (BVN) system in Nigeria, amassing N329 million by using static images of individuals for fraudulent registrations. A report from the Nigeria Inter-Bank Settlement System disclosed that corrupt enrollment agents, through the use of these images, facilitated the scheme by falsely registering individuals, both local and foreign, as live enrollees. Consequently, the fraudulent BVNs were employed to establish bogus accounts across microfinance banks, mobile money operators, and payment service banks.

These fraudulent accounts allowed the immediate execution of transactions involving the stolen N329 million just days after their creation. Investigations indicated that some of these BVNs, registered with static images, bore Nigerian names, thus complicating their detection as fraudulent during the enrollment process. Following this revelation, numerous fraudulent BVNs have been eliminated and the implicated agents have been referred to law enforcement for potential arrest and prosecution.

The NIBSS report further highlighted that the overall financial losses due to fraud in Nigeria escalated to N52.26 billion in 2024, marking a staggering 350% rise from N11.61 billion in 2020. Conversely, the number of reported fraud cases decreased by 31% from 101,624 in 2020 to 70,111 in 2024. This rise in financial loss was attributed to more sophisticated fraudulent schemes, system weaknesses, and an increase in high-value fraud incidents.

Furthermore, attempted fraudulent transactions in 2024 reached N86.36 billion, with actual losses climbing by 195% when compared to 2023. In an effort to combat fraudulent BVN activities, the Central Bank of Nigeria has mandated that financial institutions report any detected fraudulent BVNs to the NIBSS within 24 hours.

In summary, the alarming trend of fraudsters utilizing static images for BVN registrations highlights significant vulnerabilities in Nigeria’s financial sector. The reported loss of N329 million and the 350% increase in fraud losses underline the urgent need for enhanced security measures and vigilance. The Central Bank of Nigeria’s response to enforce timely reporting of fraudulent activities is a crucial step towards mitigating such fraudulent schemes.

Original Source: punchng.com