The report revealed a growing trend of financial fraud, with compromised bank officials and agents facilitating the illegal registration of BVNs for underaged individuals. These BVNs were then used to open enterprise accounts, through which fraudulent transactions were carried out.
The NIBSS report, which detailed two major cases where BVNs were fraudulently created for minors, leading to significant financial losses, disclosed that in one instance, a compromised bank staff registered a BVN for a minor and opened an enterprise account, which later received N495.3 million. The funds were swiftly withdrawn.
In another case, a corrupt banking agent enrolled a BVN for a minor and opened a business account under the name of a bakery. The fraudulent account received N507 million, which was immediately transferred before authorities could intervene. Both cases resulted in losses exceeding N1.002 billion, with funds quickly moved through multiple accounts to evade detection.
The NIBSS report also implicated financial institution employees in facilitating these fraudulent activities.
According to it, a bank staff member was directly linked to one case, while an agent involved in the second case has been reported to law enforcement for possible prosecution.
Regulatory bodies are working with the affected bank to assess internal complicity and enforce stricter verification measures to prevent similar incidents, the report added.
Despite a 31 percent drop in reported fraud incidents between 2020 and 2024, financial losses from fraud surged by 350 percent, rising from N11.61 billion in 2020 to N52.26 billion in 2024. Fraudsters are exploiting regulatory loopholes, weak identity verification processes, and corrupt intermediaries to carry out financial crimes.
The NIBSS report also identified other fraud schemes, including identity theft of senior citizens, with fraudsters using their details to open bank accounts and funnel over N400 million. It further exposed cases where fraudulent corporate accounts were created, such as an oil and gas company that received N335 million on its opening day.
Additionally, criminals have been using cryptocurrency transactions disguised as gift card purchases to launder fraud proceeds, making it harder for authorities to track stolen funds.
To prevent future fraud, NIBSS has recommended stricter BVN registration processes, real-time biometric validation, and the implementation of an Enterprise Fraud Management System to flag suspicious transactions.
It also called for fraudulent BVNs to be blacklisted and for all newly opened financial accounts to be profiled within 24 hours to improve fraud detection and enforcement.
The report further urged government agencies and anti-fraud units to take swift action to safeguard Nigeria’s financial system from further exploitation.
Source: www.guardian.ng
