Ibrahim Apekhade Yusuf in this report recounts the harrowing experiences of customers of money deposit banks who in recent times have suffered a run of misfortune from using the automated teller machines (ATMs)
TO say that the introduction of the Automated Teller Machines (ATM) revolutionised electronic payment in the country and is generally acceptable to the banking consumer public is not in doubt.
This is because, ATM, a self-service machine, dispenses cash and performs some human teller functions like balance enquiry, bills payments, mini statements and so on. ATM transactions are carried out through the use of a debit/credit card which enables the card holder(s) to access and carry out banking transactions without a teller
It is, however, an irony of fate that this same ATM technology that offers a world of convenience to customers and provides banking services well beyond the traditional brick and mortar service period is gradually becoming a source of worry to many users.
In the last few weeks, banks have been inundated with complaints by customers who have suffered one form of misfortune or the other as a result of using some ATMs belonging to some of these money deposit banks in different parts of the country.
From Lagos, Oyo, Ogun, Akure, Uyo, Port Harcourt, Kano, Lafia, Calabar, Aba, Owerri, to mention just a few, bank customers have sad tales to tell.
Some of these complaints range from ATMs dispensing counterfeit N1000 notes or short-changing customers outright, poor service, just as a majority expressed frustration with banks crediting their accounts without cash remittance from ATMs, loss of cards on dysfunctional ATMs, among others.
Tales of woes
A visit by our correspondent to some ATM points in Lagos metropolis and environs revealed that not many of the ATMs were dispensing cash.
Some of the customers, in separate interviews with The Nation, lamented that the situation had made banking a very unpleasant experience.
They contended that the epileptic services may defeat the objective for the introduction of ATMs.
According to them, the development was a big threat to CBN‘s cashless policy.
Recounting his experience, Mrs. Titilayo Akanbi, a school proprietor at Surulere axis of Lagos, said, “ATMs are a big frustration these days. Imagine customers travelling from one machine to another to get cash, simply because most of them are out of service.
“In the last couple of weeks, it has been practically impossible to use the ATMs in my neighbourhood. Just last week, some of my staff went to get money at one of the bank’s ATM in Adeniran Ogunsanya. After a tireless wait of three hours on the long queue, at the end of the day, they could not get cash because the machine ran out of money before it was their turn.
“It is really frustrating using the bank ATMs these days. Many customers can testify to this,” said Mrs. Akanbi.
Echoing similar sentiments, another customer, Rachel Okeke, a trader, said she had dashed to the ATMs last Monday in order to raise money for some pressing family commitment but ended up disappointed because most of the machines were not functioning.
Sharing his own experience, Fred Adenuga, said he had visited one of the banks sometime last month hoping to get some money and proceed to Akure for a job interview, but that was not to be.
According to Adenuga, “I visited over 10 banks and none of their ATMS was working and to make matters worse, I was not with my pass book, as such I was now forced to borrow money from one of these money lenders at outrageously cut-throat rate just to enable me keep my interview appointment. It was not a pleasant experience at all for me.”
Another customer, Mr. Wasiu Alabi, a student, also said as a result of the poor ATM services he almost missed his exams last week.
“Last week, I put my card to withdraw money, they did not pay me but the bank debited my account that I have been paid,” he said.
“It took three days before they could credit back the money. Since then, I have been borrowing money to feed and write my exams.”
Only recently, another customer who withdrew money from an old generation bank’s ATM and headed for another bank few metres away to deposit part of the money was shocked when the cashier told him that some of the N1000 notes were counterfeit.
Efforts by the unsuspecting customers to explain the source of the money were rebuffed, as the bank officials threatened to arrest him.
Customers of various commercial banks in Calabar, the capital of Cross River State, have also had to swallow the bitter-pill as a result of frustration from using ATMs.
For the past two weeks, ATM services of most of the commercial banks in the city had been malfunctioning, thereby leaving customers stranded, sources said.
In many of the commercial banks visited, inscriptions such as “no service”, “out of service”, “visit other banks” had become common while customers wore long faces thinking of the next option.
At a programme which the Consumer Advocacy Forum of Nigeria recently, Akeem Awe, a businessman and a customer of Zenith Bank, shared his experience on how he lost all his savings to ATM fraudsters in less than 20 minutes.
“I got an alert on my phone that a transaction of N490,000 was made. I didn’t understand the text because I never withdrew any money. Immediately, I called my account officer to inform him. As I finished talking to him, a new text came in that another N490,000 had been withdrawn. I called the account officer back and told him the latest development. He asked if I had misplaced my ATM card, and I said no because the card was with me,” Mr. Awe narrated.
He said that the bank officer immediately promised to notify Interswitch, the ATM service provider, so that the card could be blocked.
He said further: “About 10 minutes later, another alert came in that N80,000 had been withdrawn. In total, N1,060,000 was withdrawn from my account on the same day. Initially, the bank acknowledged the case after writing through my lawyer, but for several months now nothing has been done on the matter. When I went to the bank in Apapa to challenge them, they used armed security men to force me out of the bank premises. I’ve gone to human rights activists and the EFCC for help but nothing has been done till date.”
The lawyer added, “The position of the law is that the banks have a mandatory duty to protect customers’ fund. Banks are to protect funds by ensuring that there is no manipulation on customers’ account or unauthorised withdrawal. In the event that a customer loses money, or occasions that the bank fails to protect the fund, the customer can bring a legal action of a breach of contract against the bank.
“In developed countries like the United Kingdom and the United States of America, when a customer of a bank loses money, the responsibility shifts directly to the bank unless investigation reveals otherwise. In Nigeria, it’s the other way round. We really don’t address product liability that shifts defective products to the manufacturer.”
Mr. Onyiuke said that victims could also press charges in cases where ATM fraudsters made unauthorised withdrawals that are above a bank’s maximum limit for daily withdrawal.
The lawyer said that he recently discovered that the banks go for cheap teller machines. “One of the card companies told me that banks had options on the types of cash machines to use but decided to go for the cheap one,” he said.
Meanwhile, discoveries have shown that most times, ATM fraud occurs in isolated places around 12 midnight on Fridays to midnight on Sundays.
Experts have advised banks to have a 24-7 hour call centres where unauthorised transaction, when reported especially on weekends, could be quickly blocked.
They encouraged the banks to embrace the international practice for financial institutions on product issuance, which demands that any product like ATM card going to the citizenry must have insurance policy.
Tochukwu Onyiuke of Punuka Attorneys & Solicitors, confirmed that of the over 700 ATM scam cases he is handling, none of the banks involved has shown genuine interest in rendering assistance to the victims.
“Banks in Nigeria are fond of pushing blames to the customers even before investigating. Banks always claim that the customers compromised their Personal Identification Numbers (PIN). But most times, we have discovered through investigations, that the claims were false,” said Mr. Onyiuke.
He said the practice whereby banks are just issuing ATM cards to customers without their consent is unprofessional.
He added that some of the leading banks in many of the cases he is handling include BankPHB, Intercontinental Bank, and Union Bank.
ATM fraud global
phenomenon
According to Dr. Johnson Olabode Adeoti, Business Administration Department, University of Ilorin, Ilorin, Nigeria, “The problem of ATM frauds is global in nature and its consequences on bank patronage should be of concern to the stakeholders in banks.”
One of the frequent causes of fraud, Adeoti stressed, “is when customers are careless with their cards and pin numbers as well as their response to unsolicited e-mail and text messages to provide their card details.”
He further observed that the current upsurge and nefarious activities of ATM fraudster is threatening electronic payment system in the nation’s banking sector with customers threatening massive dumping of the cards if the unwholesome act is not checked.
The economist identified different ATM-related frauds as follows:
“Shoulder Surfing, a fraud method in which the ATM fraudster uses a giraffe method to monitor the information the customer keys into the ATM machine unknown to the customers. Lebanese Loop, a device used to commit and identify theft by exploiting Automated Teller Machine (ATM). Its name comes from its regular use among Lebanese financial crime perpetrators, although it has now spread to various other international crime groups,” he stated.
The use of stolen cards, he added, is a situation in which the ATM card of a customer is stolen and presented by a fake presenter, just as card jamming.
Use of duplicate ATMs, where fraudsters use software which records the passwords typed on those machines. Thereafter duplicate cards are manufactured and money is withdrawn with the use of stolen passwords.
Meanwhile, a recent research, carried out by Cambridge University, revealed that nearly 10 percent of four-digit ATM PIN codes used for banking purposes could be guessed by an opportunistic thief before the card is blocked.
In what appears to be the first study of its kind, the researchers say that the widespread usage of dates of birth as PIN codes is primarily to blame for the weakness. The researchers used a combination of leaked data from non-banking sources (specifically 200,000 smartphone unlock-codes and the 1.7 million entries in the RockYou dataset) and an online survey as the data set for the research. In the survey, 1,300 people were asked if their ATM PIN code fell into one of the general categories the team had identified (no, they were’t asked for their PIN codes!).
But Mr. Mitchell Elegbe, managing director of Interswitch, said that much has been put in place to ensure that issues associated with the smooth connectivity between banks are addressed and that debit errors experienced by customers are being reduced, with collaboration with the banks. And Mr. Tunde Shofowora, spokesman of First City Monument Bank Plc, said that system failure is occasional and not yet trendy in banks.
Insisting that his bank does not have such a hitch, he explained that customers have alternative outlets outside the banking halls such as on-line ATM to do their banking businesses. He also revealed that banks are currently upgrading their IT networks which involve increasing security features essentially to ward off hackers who might attempt to enter their systems.
A head of corporate affairs in one of the banks, who pleaded anonymity, did not rule out the handiwork of people he described as ‘bad elements’ in the system.
According to him, there is need for the banks to take extra vigilance on personnel uploading cash into the ATMs and double-check bundle of currency notes being up-loaded in ATM by the tellers.
Apparently reacting to the development, CBN said it does not have the responsibility for the supply of cash to ATM, noting that ATMs are owned and deployed by banks, as well as independent outfits.
To adequately address the challenges facing the implementation of ATM, the apex bank on 17th May 2010 issued standards and guidelines on ATM operations, spelling out conditions for liability for ATM fraud. The CBN also mandated banks to ensure online monitoring mechanism to determine ATM vault cash levels, monitor and report suspicious transactions on agreed format and time frame.
The way forward, according to analysts, is for all hands to be on deck and ensure that all available loopholes are blocked to ensure users are not fleeced.
