Fraudsters Steal Over ₦1 Billion Using BVNs Registered for Minors – NIBSS Report
A new report from the Nigeria Interbank Settlement System (NIBSS) has revealed that fraudsters have exploited the Bank Verification Number (BVN) system by registering BVNs for minors, stealing over ₦1 billion. The report highlights this as part of a broader wave of emerging fraud schemes plaguing the Nigerian financial system.
In addition to the misuse of BVNs for minors, the report identified several other fraudulent practices. One notable scheme involved criminals using the identities of elderly individuals to open bank accounts. Through these accounts, over ₦400 million was illicitly channeled.
The misuse of corporate accounts for fraudulent activities is another growing concern. In July 2024, an oil and gas company’s corporate registration documents were falsified, leading to the opening of a fraudulent account. A sum of ₦335 million was transferred into this account on its first day of operation, and the funds were rapidly moved to unregulated Bureau De Change (BDC) operators. However, thanks to swift actions by NIBSS and law enforcement agencies, the funds were successfully recovered.
Another disturbing trend uncovered in the report involves the laundering of fraudulent proceeds via cryptocurrency transactions disguised as gift card purchases. The NIBSS report noted that financial institutions often do not provide information on the final beneficiaries of these transactions, complicating efforts to trace the stolen funds.
Calls for Enhanced Regulatory Measures
In response to these alarming trends, NIBSS has called for stronger regulatory actions to prevent future fraud. Key recommendations from the report include:
The enforcement of thorough identity verification during BVN registration, incorporating real-time biometric validation to prevent fraudulent entries.
The establishment of an Enterprise Fraud Management System to detect and halt suspicious transactions in real-time.
The permanent blacklisting of fraudulent BVNs to prevent further abuse of the financial system.
A directive for authorities to profile all new financial accounts within 24 hours of opening to bolster fraud detection and enforcement efforts.
These measures are aimed at safeguarding Nigeria’s financial system and reducing the opportunities for fraud.
