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Nigerian fintech loses nearly USD 317,200 previously retrieved from fraudsters

Friday 30 August 2024 09:12 CET | News

A Nigeria-based fintech, which initially lost USD 317,200 and supported customers in recovering the amount from fraudsters, has announced that the account in which the funds were stored was hacked into. 

As per the information detailed in court documents, the fintech firm, which deposited the recovered funds with a tier-2 Nigerian commercial bank, stated that the account was fraudulently hacked into, with the stolen funds being transferred to 26 banks and financial technology companies. The fraudsters leveraged a standard method which allowed them to widen the trail and cause difficulties in recovery efforts. According to an excerpt of a court document seen by TechCabal, the company mentioned that some of the funds represented amounts recuperated on behalf of clients, which were supposed to be remitted by the petitioner to the owners.

Nigerian fintech loses nearly USD 317,200 previously retrieved from fraudsters

At the time of the announcement, the fintech had already begun making progress on the process of regaining the funds, however, customers were becoming increasingly impatient. The court document mentions that the fintech’s clients pressure the company into collecting their money, however, it cannot provide any explanation regarding what exactly happened to their funds.

Moreover, the company asked the court to coerce the 26 banks and fintechs to share their clients’ Know Your Customer (KYC) records and block their accounts from making any transactions, underlining the importance of taking these measures. Additionally, the fintech firm requested the court to issue arrest warrants for three suspected perpetrators.

Fraud across Nigeria’s financial sector

According to the Report on Fraud and Forgeries in Nigerian Banks for Q1 2024 conducted by the Financial Institutions Training Centre (FITC), Nigerian banks saw a substantial minimisation in financial fraud losses at the beginning of the year. Compared to the fourth quarter of 2023, the total amount lost declined by 77.62%, with the number of fraud cases reported by financial institutions dropping considerably as well. In Q1 2024, there were reported a total of 11,472 cases while in Q4 2023, 12,405 cases were recorded across the region.

Furthermore, the report mentioned that the most prevalent forms of fraudulent activity included computer fraud, mobile fraud, and POS-related fraud, with the findings being consistent with trends observed in Q4 2023. Despite the decline, the FITC highlighted that banks need to remain cautious, encouraging them to review and optimise their fraud control measures to ensure that the numbers continue to drop in the future.

Source: Link


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Keywords: identity fraud, transaction fraud, online security, financial services, financial institutions
Categories: Fraud & Financial Crime
Companies:
Countries: Nigeria
This article is part of category

Fraud & Financial Crime

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