With the rising daredevilry in the brazen manner Nigerians are daily being fleeced of their hard earned bank deposits, not a few have lost trust in the digital platforms for secured cash transactions. For the restoration of sanity and assurance of the digital platform for the advancement of the digital economy dream of the Federal Government, drastic measures need to be put in place. LUCAS AJANAKU reports.
Esther Johnson (not real name) needed cash to attend church service. So on a Saturday, she reached for her Sterling Bank Automated Teller Machine (ATM) card and headed for the Wema Bank branch at Jibowu, Yaba area to make withdrawal.
A single mother of two, she was disappointed that instead of vomiting cash, the machine swallowed her card. Frustrated, she approached the security men to help her retrieve her card so she could go and try another ATM but her appeal fell into deaf ears. She left the bank completely shattered at about 3.33 pm that day without the card.
Her world came down when at about 4.33pm that same day, all her cash was withdrawn by a yet to be identified person. “The total sum of N70,000 was withdrawn with LA LANG POS while the remaining N1,000 was withdrawn via a GTBank ATM at Idioro Branch, Mushin at about 4.43pm. What made it so painful to me is the fact that N50,000 out of the money was supposed to be for my monthly contribution for (ajo). The person that is supposed to collect the money has been disturbing me. I am a single mother of two girls all in secondary school. Efforts to get the cash refunded have been unsuccessful as the two banks have kept tossing me around like a useless coin,” she said, adding that she is beginning to lose hope of ever getting her stolen cash refunded.
These fraudsters do not respect people’s stations in life. Thus, the Executive Vice Chairman, Nigerian Communications Commission (NCC), Prof Garba Umar Dambatta, was also targeted. According to the professor, $5000 was withdrawn from his account by unscrupulous elements. Though he didn’t give details whether the cash was withdrawn with a cloned dollar account or via online banking app, it was not clear too if on account of his good office, he was able to get his cash refunded.
Another bank customer, Kokumo Goodie (not real name) recalled how his GTBank account fell prey to fraudsters. According to him, an old female secondary school classmate of his based in the US sent N100,000 to him. He made N5000 withdrawal at Globus Bank in Ladipo area of Mushin at about 9.30pm the same day. By the time he woke up the following day, N50,000 had been withdrawn from his bank account. He quickly dashed into a nearby branch of the bank to complain. “It was during the investigation of other transaction details on the account that I discovered that over the past three months, aside from frequent N5,000 withdrawals, my account was being debited monthly for Netflix subscription. I was shocked. Do I have the time to even enjoy the Dstv subscription I pay every month, not to talk of Netflix? As usual, I was asked to come after 45 days or so. When I got there, they gave me a letter absolving themselves of any wrongdoing. As a technology reporter, I told them I also educate card users about the need to keep their card details secret and could not have compromised my card details, they just ignored me and left me to lick my wound. I accepted the cruel fate that befell me but lost trust in the digital platform,” he recounted.
These are but just a tip of an iceberg when the misfortunes of bank customers are recounted. As a matter of fact, so many bank customers have lost their life savings and nothing happened because neither the mobile network operator (MNO) through whose platform the call that led to the stealing was originated from nor the bank which had custody of the cash was ready to bear responsibility/liability for the egregious mindless stealing. The banks will not admit that there are robbers recruited to work in the banking halls as tellers, many of them, engaged through third parties which make them to be at best, corporate casual labourers.
So, the bank customers have continued to be at the receiving end of the dirty game while the banks post fantastic profit after tax year-on-year, a la monkey dey work, baboon dey chop.
Prof Danbatta, who spoke at the second quarterly Industry Consumer Advisory Forum (ICAF) with the theme: “Combating E-fraud on Telecom Platforms and Building Consumer Confidence in the Digital Economy” in Lagos, said digital technology offers Nigeria the opportunity to grow and diversify its economy from the overdependence on agriculture or oil and gas export proceeds, adding that the launch of the Nigerian National Broadband Plan 2020 – 2025 as well as the National Digital Economy Policy and Strategy 2020 – 2030 (NDEPS) attests to the fact that the country is poised to join the comity of nations and become a global leader in transforming its economy into digital.
He said in recent years, Nigeria has witnessed remarkable growth in the digital economy, revolutionizing the way we communicate, transact, and conduct business. The telecom sector plays a pivotal role in enabling this digital transformation, providing the infrastructure and connectivity that fuel our interconnected world. However, with these advancements come new challenges, one of which is the rising tide of e-fraud and cybersecurity concerns.
“E-fraud encompasses a wide range of malicious activities carried out via electronic means, including identity theft, phishing, hacking, and unauthorized access to personal and financial information, with the intention to defraud or take advantage of victims. These criminal activities may not only cause significant financial losses but also erode consumer trust in the digital ecosystem,” he said.
Director, Consumer Affairs Bureau (CAB) at NCC, Alh Alkasim Umar said the issue to be addressed is and affects not only the telecommunications industry but also the overall safety and security of our nation’s digital landscape.
“In recent years, the growth of the telecommunications sector in Nigeria has been remarkable. With increasing access to mobile phones and internet connectivity, we have witnessed a surge in digital transactions, making our lives more convenient and efficient. However, this rapid expansion has also opened new avenues for criminals to exploit unsuspecting individuals through various forms of electronic fraud. According to some reports, Nigerians have lost about N12.5 billion to financial crimes linked to the telecommunications industry in the past four years.
The Center for Strategic and International Studies (CSIS) estimated that $600 billion is lost to cybercrime each year, an increase from a 2014 study that put global losses at about $445 billion,” he said.
According to him, e-fraud poses a significant threat to the society as it undermines the trust and confidence in the digital platforms, hampers economic growth, and adversely impacts the lives of the citizens. “As the regulatory authority responsible for overseeing the telecoms industry, the NCC recognizes its duty to safeguard the interests of consumers and protect the integrity of our digital ecosystem,” he said.
ICAF chairman, Mazi Akpa Emeka said fraud has escalated as digital adoption has increased. The situation requires that organizations simultaneously combat fraud and provide customers with a seamless digital experience.
According to him, digital adoption leapfrogged a decade in days during the COVID-19 pandemic, accelerating the shift to digital and multi-channel client service that began in the 2010s.
Emeka said the pandemic-driven boost to e-commerce is estimated to have exceeded $200 billion in 2020 and 2021.
He said: “Increased digital adoption has enabled new forms of fraudulent activity and amplified the importance of effective fraud management for promoting growth and meeting customers’ increasing expectations for digital experiences. Although most companies have improved their digital user interface and experience, many have struggled to effectively enhance fraud controls without impairing the client experience.
“Many organizations report that they are being overwhelmed by the sheer volume of fraud attempts. In financial services, for example, many banks are so inundated by fraudsters that they cannot meet online origination targets; they are unable to verify identities and authenticate customers while combating fraud. At the same time, fraud threat vectors have become significantly more sophisticated. They include nation-state actors, organized criminals, cyber terrorists, and insiders, as well as local fraud rings. Advances in technology present challenges as fraud attacks occur with greater frequency, speed, and effectiveness. Commonly used methods include phishing (Phishing occurs when a hacker pose as a trusted figure who uses carefully created emails to trick you into visiting a malicious website, downloading a corrupt file or handing over your password before using that information to gain access to a business network or your personal information), destructive malware, social engineering, deep fakes, and fraud-as-a-service exploit kits.”
According to him, faster movement of money usually increases the risk of fraud, and real-time disbursements are set to double within the year and beyond as economic hardship gets tougher. Risk rises further when unsuspecting customers inadvertently share their authentication details with fraudsters targeting their devices and accounts.
“The evolution of fraud threats has undermined the effectiveness of a reactive approach to combating fraud, which essentially focuses on stopping schemes one by one through manual reviews,” he said.
Way forward
The NCC chief said as the regulator of the communications sector, it has a crucial role to play in combating e-fraud.
“We must establish comprehensive legal frameworks and standards that mandate sound security practices for telecom operators. The legal framework must focus on data protection, privacy and incident response, ensuring that operators are held accountable for any lapses in security on their respective networks.
“The NCC also type-approves communications equipment to ensure that they conform to global standards and are interoperable with various relevant technologies. In this regard, the Commission collaborates with MNOs to ensure the safety of their networks and conducts regular audits and assessments to verify compliance and encourage a culture of cybersecurity within the industry.
“In accordance with the Nigerian Communications Act 2003, telecom operators have a responsibility to ensure the security and integrity of their networks and to prevent it from being used in or in relation to the commission of any offence under any law in operation in Nigeria. With the increasing uptake of digital financial services and the advent of disruptive technologies, the issue of cybersecurity has become increasingly important. Telecom operators must therefore invest in robust infrastructure, employ state-of-the-art security measures, and conduct regular audits to identify vulnerabilities and address them promptly. Additionally, operators should implement stringent authentication protocols, two-factor authentication, and encryption mechanisms to safeguard customer data and prevent unauthorized access,” he said.
According to him, there is also the concern about how personal data is collected, stored, shared and exploited. Fortunately, NDEPS 2020-2030 adequately addresses the protection of telecom consumers against the threats of cybercrime, encouraging them to embrace digital finance and supporting them to contribute to the Digital Economy. Pillar #6 of the NDEPS, which deals with soft infrastructure, has proven to be proactive. “The soft infrastructure pillar focuses on strengthening public confidence in the use of digital technologies and participation in the Digital Economy. The pillar will address the importance of cybersecurity and other standards, frameworks, and guidelines that encourage citizens to embrace a digital culture. Data privacy and the deployment of technologies like the public key infrastructure are addressed in this pillar.
“Recently, the Nigeria Data Protection Act 2023 was signed into law to provide a legal framework for the protection of personal information and the regulation of how personal information is processed among other things. The NCC is also in the process of developing more elaborate Data Protection Regulations to ensure the protection and privacy of data in the Nigerian communications sector. It is important to mention that the Commission has issued the Consumer Code of Practice Regulations 2007 which among other things, provides for the protection of consumer information.
Law Enforcement Agencies must also collaborate closely with telecom operators and regulatory bodies to investigate and prosecute e-fraud perpetrators. Enhanced coordination, information sharing, and dedicated cybercrime units can go a long way in deterring criminals and bringing them to justice. Strengthening international cooperation in combating cross-border e-fraud is also imperative, as cybercriminals often exploit jurisdictional limitations.
The Commission, he said, is committed to fulfilling its mandate and passionate about driving the Digital Economy in Nigeria and has continued to implement initiatives to protect, inform and educate telecom consumers in this regard. “Through its CAB, the Commission undertakes constant consumer education with a significant part of this effort dedicated to providing information that equips the consumer to thrive in a world that has embraced digital finance. Information dissemination materials on how to safeguard themselves while using telecom platforms to access digital financial products are available on the NCC consumer portal whilst hardcopies are distributed at consumer outreach events.
To further protect telecom consumers, the NCC Computer Security Incident Response Team (NCC-CSIRT) periodically notifies telecom consumers of the latest cybersecurity threats and how to avoid falling victim to them. NCC-CSIRT in collaboration with the Nigeria Computer Emergency Response Team (ngCERT) at the Office of the National Security Adviser (ONSA) has been at the forefront of protecting telecom consumers from cyber threats. The provision of timely advisories has helped to protect consumers from being unfairly targeted by cyber-attacks, which goes a long way in ensuring that they can access digital services without suffering unwarranted losses. We strongly believe that by fostering a culture of vigilance and knowledge, we can collectively reduce the success rate of e-fraud attempts.
Collaboration
It was agreed that combating e-fraud is not just the responsibility of industry stakeholders and authorities. Consumers too, must be active participants in the battle against e-fraud. Building consumer awareness and promoting digital literacy is crucial to empowering individuals to protect themselves. Telecom operators should educate their customers about potential risks, provide guidance on secure online practices, and offer user-friendly tools to monitor and manage their accounts. Regular communication with customers, promptly addressing their concerns, and providing timely updates on security issues are vital in establishing trust.
“To build consumer confidence in the Digital Economy, we must emphasize transparency and accountability. Telecom operators should be transparent about their security measures, privacy policies, and incident response mechanisms. Collaboration with third-party security firms and independent audits can also help validate the integrity of telecom platforms.
“Furthermore, fostering innovation in security technologies is critical to staying ahead of e-fraudsters. Advancements in artificial intelligence (AI), machine learning and data analytics can enable the detection of anomalous behaviors, identify potential threats, and respond swiftly to emerging fraud trends. Collaboration between academia, industry and research institutions can drive innovation in cybersecurity and produce effective countermeasures against e-fraud.
“Combatting e-fraud on telecom platforms and building consumer confidence in the digital economy requires a collective effort. Telecom operators, regulatory bodies, law enforcement agencies, and consumers must collaborate, each fulfilling their respective responsibilities. By investing in robust security infrastructure, implementing stringent protocols, promoting awareness, and fostering innovation, we can create a safer digital ecosystem that inspires trust and enables the full potential of the digital economy,” Prof Danbatta said.
Umar agreed no less with Prof Danbatta. He said the battle against e-fraud requires constant adaptation and continuous improvement.
“I urge all stakeholders to prioritize consumer education and awareness. By equipping individuals with the necessary knowledge and skills to identify and report e-fraud, we can empower them to protect themselves and contribute to the broader fight against cybercrime.
The Consumer is one of the major stakeholders in the telecoms industry. It is our desire as a Commission to ensure that they enjoy primary focus. We believe that through adequate education, information sharing, and the provision of an array of channels for redress, we can safeguard telecom consumers, and innovatively promote the prospect for greater consumer experience in the Digital Economy,” Umar said.
