How to beat cyber criminals

In an increasingly digital banking landscape, fraudsters continue to devise sophisticated methods to exploit unsuspecting customers. With the rise of online banking and financial apps, TEMITOPE AINA writes on how to stay ahead of these scams and how to safeguard your finances

In an era where digital banking is becoming the norm, financial institutions and consumers alike face the growing threat of fraud. The Nigerian banking sector, which has seen rapid digital transformation, is also witnessing an alarming rise in fraud-related incidents.

This article delves into the evolving tactics of scammers, highlighting practical ways to identify fraudulent activities, and tips for achieving seamless and secure banking experiences in Nigeria and exploring the intricacies of digital banking fraud. It offers insights into how scammers operate and provides actionable tips to help consumers protect themselves and ensure seamless transactions.

Digital banking fraud

According to recent statistics from the National Bureau of Statistics, fraud and cybercrime have become significant concerns within Nigeria’s financial sector. The NBS reports that fraud-related cases in the banking sector rose by approximately 40 per cent in 2023 compared to 2022. This surge underscores the urgent need for enhanced fraud detection and prevention mechanisms.

Recently, the Securities and Exchange Commission, Nigeria arrested a suspect for trying to defraud the commission. It is obvious that, in recent times, fraud is gradually becoming a norm.

Recently, PUNCH reported that Guaranty Trust Bank Plc confirmed an isolated incident of an attempt to compromise its website domain. The hacking attempt occurred on Wednesday, just a day after the bank renewed its domain name, causing a temporary disruption to the website, which left customers unable to access online services.

“While there was an isolated incident of an attempt to compromise our website domain, we would like to assure all our customers and stakeholders that the bank’s website has not been cloned and that we do not store customer information on our website, and as such, there has been no instance of compromise of customer data.”

This led to widespread concerns and media reports suggesting that the bank’s website had been cloned, potentially putting customer data at risk. Fortunately, the bank stated that the incident was unsuccessful, and its website remains intact.

SB Morgen Intelligence, a geopolitical research firm, says the amount of money lost to fraud in Nigeria’s financial sector increased by N14.71bn or 83 per cent between 2019 and 2023.

It was recently reported how a witness for the Economic and Financial Crimes Commission, Babatunde Aro, narrated how a former Group Managing Director of the defunct Intercontinental Bank, Erastus Akingbola, allegedly bypassed banking protocols to transfer $11.8m and £8.54m offshore without recourse to the bank’s standard procedures.

The Central Bank of Nigeria also highlighted the increasing sophistication of financial scams. In its 2024 Financial Stability Report, the CBN noted a substantial increase in fraud cases, attributing much of the rise to advances in technology and the increased use of digital banking platforms. The report revealed that in 2023, fraudulent transactions amounted to over N100bn, reflecting the scale of the problem.

According to Fortinen,  types of digital banking scams include:

Phishing: This remains one of the most common forms of online fraud. Scammers use deceptive emails, messages, or websites to trick individuals into disclosing sensitive information such as passwords or bank account details. According to the Nigeria Communications Commission, phishing attempts in Nigeria increased by 35 per cent in 2023. Fraudsters often disguise themselves as legitimate entities, such as banks or government agencies, to gain trust and manipulate victims.

Vishing (Voice phishing): It involves scammers using phone calls to impersonate bank representatives or other trusted figures to obtain confidential information. The Nigerian Financial Intelligence Unit reported a rise in vishing cases, with over 5,000 incidents recorded in the past year alone. These calls often involve urgent messages about account security or prize winnings, designed to create a sense of urgency and pressure victims into divulging their information.

Smishing

Smishing is similar to phishing but occurs through short messages. Scammers send fraudulent texts that may contain links to fake websites or requests for sensitive information. According to recent data from the NCC, smishing attacks increased by 25 per cent in 2023, reflecting a growing trend in text-based fraud.

Account takeover

This involves fraudsters gaining unauthorised access to an individual’s bank account and conducting transactions without their knowledge. This type of fraud often follows a successful phishing or vishing attack. The NBS has reported a 20 per cent increase in account takeover incidents over the past year.

Investment scams

Investment scams, including Ponzi schemes and fake investment opportunities, continue to defraud individuals by promising high returns with minimal risk. The EFCC has highlighted a rise in such schemes, with several high-profile cases involving millions of naira.

Tips for safe banking

Verify communication sources: Always verify the authenticity of communications from your bank or other financial institutions. Do not click on links or provide personal information in response to unsolicited messages or calls. Contact your bank directly using official channels if you have any doubts.

Use strong passwords and MFA

Create strong, unique passwords for your online banking accounts and enable multi-factor authentication. Avoid using easily guessable passwords or reusing passwords across multiple accounts.

Monitor Your Accounts Regularly

Regularly review your bank statements and transaction history for any unauthorised activities. Promptly report any suspicious transactions to your bank to minimise potential losses.

Be cautious with public Wi-Fi

Avoid accessing your bank accounts or conducting financial transactions over public Wi-Fi networks. Use a secure, private connection to protect your sensitive information.

Educate yourself and others: Stay informed about the latest fraud tactics and share this knowledge with friends and family. Awareness is a powerful tool in preventing fraud and ensuring that individuals are prepared to recognise and respond to potential scams.

Keep your devices updated: According to the NCC, keeping your smartphone, tablet, or computer software up to date is essential for online security. Regular updates often include security patches that protect against vulnerabilities exploited by scammers.

Ignore unsolicited financial offers

The EFCC warns against unsolicited offers promising quick financial returns or investment opportunities, as these are often scams. Fraudsters might lure victims into fake investment schemes using convincing but fraudulent platforms.

Enable transaction alerts and notifications

 The Nigeria Deposit Insurance Corporation recommends enabling SMS or email alerts for your bank accounts. These alerts notify you of transactions as they happen, allowing you to quickly respond if there is any unauthorised activity.

Verify the authenticity of banking apps: According to the CBN, there have been instances where fraudulent apps are designed to look like official banking apps. Always download banking apps directly from official app stores and cross-check their authenticity. Avoid downloading apps from unknown or untrusted sources.

Prioritise your BVN Security:  Individuals are advised not to share their bank verification details as it is a means for scammers to access their accounts. Do not share your details with anyone, no matter who the person is.

“BVN enrollment can be quite tricky because once your BVN is out or any of your account details are out there, then your account can be tampered with. So you have to be careful with who you share your details with, even if they mention your parent’s name or whatever, always make sure you contact your account officer first or better still walk right into the bank to know why they are requesting those details. Moreover, no bank will call you to request sensitive information,” a banker advised.

To combat the rising tide of digital fraud, Nigerian regulators and financial institutions are implementing various measures:

Enhanced security protocols

Banks are adopting advanced security technologies to protect their customers. Multi-factor authentication is becoming the standard practice, requiring users to provide additional verification beyond just a password. The CBN has mandated banks to enhance their cybersecurity frameworks, including real-time transaction monitoring and fraud detection systems.

Public awareness campaigns

 Educational campaigns are crucial in informing the public about common fraud tactics and prevention strategies. The CBN, in collaboration with other financial bodies, regularly conducts awareness programmes and workshops aimed at educating consumers on how to recognise and avoid scams. The NBS also publishes reports and statistics to keep the public informed about emerging threats.

Collaboration with telecoms

The NCC is working with telecom companies to tackle smishing and other mobile-based scams. The efforts include blocking fraudulent SMS messages and increasing consumer awareness about the risks of unsolicited messages. The NCC’s recent initiatives have seen a reduction in smishing attacks, but ongoing vigilance is necessary.

Legal and regulatory measures

The Nigerian government and regulatory agencies are strengthening legal frameworks to combat financial fraud. Recent amendments to the Cybercrime Act and the introduction of new regulations aim to address emerging threats and ensure that perpetrators face stringent penalties. The EFCC continues to investigate and prosecute high-profile fraud cases, sending a strong message to would-be scammers.

An official of one of the commercial banks identified as Toluwalope said digital banking has continued to evolve, so, approaches to combating fraud must also evolve. Tolulope opined that by understanding the tactics used by scammers, implementing robust security measures, and staying informed about emerging threats, individuals and financial institutions can work together to create a more secure banking environment.

“The collaboration between regulators, financial institutions, and consumers is crucial in the fight against fraud. With ongoing advancements in technology and increased awareness, it is possible to achieve a seamless and secure banking experience, free from the threats posed by fraudsters,” she stated.

In conclusion, the battle against digital fraud is ongoing, but it is through vigilance, education, and collaboration that you can safeguard your banking experience and ensure that transactions remain secure and seamless. Though the Nigerian financial sector’s response to these challenges will play a critical role in shaping a more secure digital economy for the future, individuals must be vigilant.