Fraudsters Utilize Static Images to Illegally Register for BVNs, Stealing N329m

Fraudsters have stolen N329 million by using static images to register for fraudulent Bank Verification Numbers (BVNs), according to a report by the Nigeria Inter-Bank Settlement System. This scheme involved registering photographs of individuals as live enrollees, enabling the creation of fake accounts used for unauthorized transactions. In 2024, financial losses due to fraud surged to N52.26 billion, prompting new reporting requirements by the Central Bank of Nigeria.

Fraudsters have reportedly defrauded individuals of N329 million by employing static images to register for Bank Verification Numbers (BVNs). This alarming statistic was revealed in a recent report published by the Nigeria Inter-Bank Settlement System, which highlights the increasing prevalence of fraudulent activities within Nigeria’s financial sector. The report indicates that unscrupulous BVN enrollment agents have facilitated this scheme by registering photographs of both Nigerians and foreigners as live enrollees to commit fraud.

The fraudulent BVNs were subsequently utilized to establish fake accounts across microfinance banks, mobile money operators, and payment service banks. These accounts enabled unauthorized transactions involving the N329 million shortly after the BVNs were generated and the bogus accounts were activated. Investigative efforts disclosed that some BVNs formed using static images bore Nigerian names, complicating the detection of their fraudulent characteristics during the enrollment procedure.

In response to these findings, numerous fraudulent BVNs have been deleted, and the agents implicated in this scheme have been referred to law enforcement agencies for potential arrest and prosecution. The report asserts, “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.”

The NIBSS report further underscores that the overall financial losses due to fraud in 2024 rose significantly to N52.26 billion, illustrating a staggering 350 percent increase from the N11.61 billion recorded in 2020. Notably, while the total number of fraud cases reported diminished by 31 percent—from 101,624 cases in 2020 to 70,111 cases in 2024—the escalation in fraud losses can be attributed to more sophisticated schemes, system vulnerabilities, and an uptick in high-value fraudulent incidents.

Attempted fraudulent transactions in 2024 amounted to N86.36 billion, with actual losses escalating by 195 percent in comparison to the previous year. To combat such fraudulent BVN activities, the Central Bank of Nigeria has instituted a requirement for financial institutions to report any detected fraudulent BVNs to NIBSS within a 24-hour timeframe.

In summary, the alarming rise in fraudulent activities utilizing static images for BVN registration highlights significant vulnerabilities in Nigeria’s financial system. The increase in fraudulent losses and the decline in reported cases suggest a shift towards more sophisticated fraudulent schemes. The Central Bank of Nigeria is proactively addressing the issue by mandating timely reporting of fraudulent BVNs, aiming to mitigate further financial losses and enhance the integrity of the banking sector.

Original Source: punchng.com