Fraudulent BVN Registrations Lead to N329m Theft in Nigeria
A staggering N329 million has been misappropriated through the illegal use of static images for the registration of Bank Verification Numbers (BVNs), as revealed in a recent report by the Nigeria Inter-Bank Settlement System (NIBSS). This alarming trend highlights emerging fraud activities within Nigeria’s financial sector.
According to the report, some dishonest Bank Verification Number enrollment agents have contributed to this fraudulent operation by registering still photographs of individuals both Nigerians and foreigners as if they were live enrollees. The fraudulent BVNs were subsequently utilized to establish bogus accounts across various microfinance banks, mobile money operators, and payment service banks.
The duplicitous scheme enabled the swift execution of transactions amounting to N329 million just days after the fraudulent BVNs were created and the fake accounts were established. Investigations revealed that many of these BVNs, generated using static images, were assigned Nigerian names. This tactic made it challenging to identify their fraudulent nature during the enrollment process.
Following these discoveries, numerous fake BVNs were eliminated, and the agents implicated have been reported to law enforcement agencies for potential arrest and prosecution. The NIBSS report detailed, “Recalcitrant agents are taking still images of both Asians and Nigerians to register for BVNs. These BVNs are then used to open accounts with microfinance banks, mobile money operators, and payment service banks.”
An estimated N329 million, identified as proceeds of these fraudulent activities, flowed into the accounts established with the illicitly obtained Bank Verification Numbers shortly before the fraudulent transactions were initiated. The report further disclosed that several BVNs created using static images of Asians were assigned with Nigerian names; this fraudulent activity was discovered during routine reviews, leading to their subsequent deletion. The involved agents have been reported to law enforcement agencies for arrest and prosecution.
Additionally, the NIBSS report emphasized that losses attributed to fraud in the financial sector soared to N52.26 billion in 2024 an alarming 350% increase compared to the N11.61 billion recorded in 2020. However, the number of fraud cases reported saw a 31% decrease, dropping from 101,624 in 2020 to 70,111 in 2024.
The rise in financial losses can be attributed to increasingly sophisticated fraud strategies, system vulnerabilities, and an upsurge in high-value fraud incidents. In 2024 alone, attempted fraudulent transactions reached N86.36 billion, with actual losses increasing by 195% compared to the previous year.
In response to the growing concerns surrounding fraudulent activities, the Central Bank of Nigeria has mandated that financial institutions report any fraudulent BVN findings to the NIBSS within 24 hours of detection.
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