Fraudsters Exploit BVN Registration Process to Steal N329 Million

Fraudsters have accrued N329 million through the fraudulent use of static images to register for Bank Verification Numbers (BVNs). A report from the NIBSS details this scheme facilitated by corrupt enrollment agents, resulting in the opening of fake accounts across various financial institutions. Although total fraud cases decreased, total monetary losses have markedly increased, prompting the Central Bank of Nigeria to enforce stricter reporting regulations.

Fraudsters have exploited the Bank Verification Number (BVN) registration process to steal a staggering N329 million, according to a recent report from the Nigeria Inter-Bank Settlement System (NIBSS). The report outlines emerging fraudulent practices in Nigeria’s financial sector, highlighting how some BVN enrollment agents facilitated the fraud by registering static images of individuals as if they were live enrollees. These fraudulent BVNs were utilized to open fake accounts across various financial institutions, resulting in significant monetary losses shortly after the accounts were created.

Investigations revealed that many of the fraudulent BVNs were assigned Nigerian names despite being created using pictures of both Nigerians and foreign nationals. This manipulation complicated the detection of the fraudulent accounts during the registration process. In response to the findings, authorities deleted numerous bogus BVNs and reported the implicated enrollment agents to law enforcement agencies for potential prosecution.

The NIBSS report notes a troubling increase in total fraud losses, soaring to N52.26 billion in 2024, reflecting a 350 percent rise from N11.61 billion in 2020. Conversely, the total number of reported fraud cases diminished by 31 percent, dropping from 101,624 in 2020 to 70,111 in 2024. The report attributes the increase in financial losses to the emergence of more sophisticated fraud schemes, as well as systemic vulnerabilities.

In 2024, attempted fraudulent transactions amounted to a staggering N86.36 billion, with actual losses increasing by 195 percent compared to the previous year. As a countermeasure against such fraudulent BVN activities, the Central Bank of Nigeria has mandated that financial institutions must report any fraudulent BVNs to the NIBSS within 24 hours of identifying them.

The exploitation of BVN registration by fraudsters, resulting in N329 million loss, reveals critical vulnerabilities in Nigeria’s financial sector. The NIBSS report underscores a significant surge in fraud losses amid declining case numbers, highlighting the evolution of sophisticated fraud schemes. As countermeasures are implemented, the need for vigilant monitoring and reporting by financial institutions remains imperative to combat fraudulent activities effectively.

Original Source: punchng.com