Fraudulent BVN Enrollment Scheme Results in N329 Million Theft

Fraudsters have stolen N329 million using static images to register for Bank Verification Numbers in Nigeria. Some agents enrolled these images as live individuals, leading to the creation of fake bank accounts that facilitated the theft. The NIBSS report indicates a marked increase in fraud losses, urging financial institutions to report fraudulent activities promptly.

Fraudsters have recently exploited static images to enroll individuals in the Bank Verification Number (BVN) system, leading to the theft of N329 million, according to a report from the Nigeria Inter-Bank Settlement System (NIBSS). The report details a rising trend in fraud within Nigeria’s financial sector, highlighting how some dishonest BVN enrollment agents registered still images of both Nigerians and foreign nationals as if they were live individuals.

The fraudulent BVNs enabled the establishment of fake accounts across various financial institutions, including microfinance banks, mobile money operators, and payment service banks. In a matter of days following the BVN generation, these fraudulently created accounts facilitated transactions totaling N329 million. Investigations revealed that many of the BVNs associated with static images bore Nigerian names, complicating their identification as fraudulent during the enrollment process.

Consequently, numerous fraudulent BVNs were deleted, and the agents involved have been referred to law enforcement for arrest and prosecution. The NIBSS report underscores, “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.”

In addition, the NIBSS report indicated that total fraud losses in 2024 escalated to N52.26 billion, marking a 350 percent increase from N11.61 billion in 2020. Despite this surge in financial losses, the total number of reported fraud cases decreased by 31 percent, from 101,624 in 2020 to 70,111 in 2024. This paradox is attributed to increasingly sophisticated fraud schemes and system vulnerabilities.

The report also noted that attempted fraudulent transactions amounted to N86.36 billion in 2024, with actual losses rising by 195 percent compared to the previous year. To combat these fraudulent activities related to BVN, the Central Bank of Nigeria has mandated that financial institutions report any fraudulent BVNs to NIBSS within 24 hours of detection.

In conclusion, the rising trend of fraud via static images in the Bank Verification Number system has led to significant financial losses, amounting to N329 million. Although the overall number of fraud cases has declined, the increase in monetary losses indicates a shift towards more sophisticated fraud methods. The financial sector is urged to enhance vigilance and adopt measures to promptly report such fraudulent activities to mitigate risks.

Original Source: punchng.com