News report that hackers have perfected another strategy to defraud people using the Automated Teller Machines (ATMs) must have made many Nigerians who have vowed never to use the device to be convinced that they have made a right decision. According to the report, the hackers fix a small fraud tool on the ATMs that grants them access to the passwords of the cardholders whenever they come to collect cash or transact other businesses on the machines.
A banker said of the development, “A number of the ATMs in Victoria Island and Lekki axis have been compromised by hackers. Some of these fraudsters visit those ATMs very late in the night or very early in the morning to fix some fraud devices on them, which are capable of collecting cardholders’ information, including their passwords. They come back later to remove those devices. The information collected is then used to commit fraud against those customers later”.
This is a serious matter. Although electronic fraud is common worldwide, many other countries are not tired of devising ways to be ahead of the fraudsters. This is what is probably lacking in the country; it appears our own bankers and security agencies are working reactively when they should be proactive. For instance, a banker who acknowledged the development said some of the banks have deployed detectives to start “combing the affected areas and the ATMs from time to time” and expressed optimism that they “will get those guys soon.” Isn’t this like trying to use analogue solution for a digital problem? What if the fraudsters realise that they are being monitored in the aforementioned places and shift base? There are thousands of ATM points nationwide, are the security men going to be moving round them at the same time?
Anyway, what seems a more pragmatic approach to dealing with the situation was offered by the Vice-Chairman, Committee of e-Banking Industry Heads, Mr. Dele Adeyinka, who assured that the incidence of such frauds should be reducing with the banks’ compliance with Central Bank of Nigeria’s directive asking them to install anti-skimming devices on their ATMs.
Nigeria joined the rest of the civilised world to embrace cashless banking and we have achieved a lot in this regard. However, we need to build more public confidence in the electronic payment to make it a success. So much money is being lost to the fraudsters. Nigerian banks lost about N40bn to electronic fraud in 2013 alone. This is huge, considering that there were other cases of fraud perpetrated in the system in the same year.
It is against this backdrop that we offer our support to the apex bank’s initiatives to stem the incidence of e-fraud. The bank had issued circulars after circulars to guide the operations of the banks with a view to safeguarding depositors’ funds. One of such directives dated January 19, 2015 prevents payment cards (debit and credit) issued by the banks from working in fraud-prone countries like South Africa, China and the United States of America.
Another directive from the apex bank barred banks in the country from making their payment/ATM cards from working in non-Europay, MasterCard and Visa countries as well as made it mandatory for the banks to only activate the cards when the owners are travelling abroad and for the duration of the trip only. Since no bank would want to lose money, the CBN’s directive that the banks would be liable for fraud committed abroad using cloned cards belonging to their customers is also a welcome development; it would make the banks take extra measures to ensure that they protect their funds.
We urge the Economic and Financial Crimes Commission (EFCC), the police and the banks to work in concert towards frustrating the fraudsters and ensure that more Nigerians develop confidence in the e-transactions. In the same vein, the CBN should fast-track the biometric registration of bank customers as a way of checking electronic frauds.