According to the FITC Report on Fraud and Forgeries for Q2 2024, the losses in Q2 represent an alarming 8,993 percent increase compared to the N468.4 million lost in Q1 2024. When compared to the N5.7 billion lost in Q2 2023, this also marks a 637 percent increase.
The report highlights that bank branches had the highest impact, accounting for around N54 billion, or 95.63 percent of the total fraud amount. This was followed by web-based fraud, which contributed N1.2 billion, while POS and mobile fraud each accounted for about 1 percent, with N651 million and N547 million, respectively.
FITC’s analysis shows that ‘miscellaneous and other fraud’ types were the largest contributors to the losses, making up 96.46 percent of the total, with a value of N41.14 billion. Losses from fraudulent withdrawals and computer/web fraud were approximately N781.2 million and N400.7 million, respectively.
The report also noted a staggering 1,784 percent increase in the total amount involved in fraud cases from Q1 to Q2 2024, escalating from N2.9 billion to approximately N56.3 billion in Q2. This rise is likely driven by increased demand for cash ransom due to kidnappings.
An examination of the data indicates a significant rise in losses across most channels, except for mobile fraud, which saw a decrease.
Specifically, losses through bank branches surged by 31,497 percent, from N133.9 million in Q1 to N42.2 billion in Q2 2024. Computer/web fraud also saw a dramatic increase of 1,560 percent, with losses growing from N24 million to N400.8 million.
In contrast, ATM-related fraud figures were not specified, and mobile fraud losses declined by 59 percent, falling from N216.4 million in Q1 to N88.7 million in Q2 2024. Card fraud saw a significant decrease of 47.66 percent, dropping from 21,469 cases in Q1 to 11,237 in Q2. However, fraudulent activity involving cheques and cash increased, with cheques rising by 36.67 percent and cash by 9.09 percent.
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FITC emphasizes the need for banks to enhance their monitoring and auditing procedures to address the escalating fraud. The Centre advises that banks should implement AI-driven tools for continuous and automated monitoring, focusing on unusual entries or patterns. Regular unannounced internal audits should be conducted, specifically targeting settlement processes to promptly identify and address any irregularities.
Additionally, improving access controls is crucial. Access to settlement files should be restricted to a small, vetted group of authorized personnel who are regularly trained on the latest security protocols. The implementation of multi-factor authentication (MFA) and role-based access controls (RBAC) can further reduce the risk of unauthorized changes to settlement files.
“Emphasizing the improvement of staff training and awareness is paramount,” FITC stated. “Intensifying fraud prevention training for all bank employees, with a focus on the latest fraud tactics and key warning signs, especially in rapidly growing areas like card-related and web-based fraud, should be a top priority.”
