ATM Fraud: Banks on the Altar of Sacrifice - 2008-08-25

One of the fastest means of banking transaction, automated teller machine (ATM) has been identified as a conduit pipe where Nigerian banking public loses money to fraud stars who deploy one gimmick or the other to dupe unsuspecting victims  Goddie Ofose writes on the imminent clampdown on banks should investigations show that they are to blame

The 'mee too' strategy adopted by industry players shifted to automated teller machine (ATM) operation soon after it was introduced into the Nigerian financial market. It became a unique selling proposition for financial institutions that first deployed it; and anyone that did not have it at that time was simply seen as outdated and old-fashioned.

The deployment of ATM brought about the 24/7 campaign theme by almost all the banks. It was a welcome relief for the teeming Nigerian banking public that one would not spend time unending in the banking hall just to withdraw some few naira notes. It makes banking easy, simply and stress-free, said Georgi Umunna, Vice Chairman, Hot Shoppe Communications.

Recently, the House of Representatives said sanctions awaits some financial institutions, especially banks, for alleged complicity in the rising number of customers who lose money through Automated Teller Machines.

The Majority Leader of the House, Mr. Tunde Akogun, penultimately week   said that the development was “condemnable and reprehensible,” adding that the House would take steps to protect the interest of banking customers.

There have been increasing complaints that some machines do not dispense cash but end up debiting the accounts of customers.

It would be recalled that the report of a public hearing on unethical practices in the banking sector, which the House Committee on Banking and Currency conducted in June is ready and the House is set to unveil it come September.

The level of fraud in the banking transaction via e-payment products and services such as ATM debit and credit cards is on the increase. The development has caused InterSwitch and 10 other partnership banks to embark on anti-fraud campaign using print, out of home and electronics to educate and advise customers on how well they can use their cards and protect it.

Out of the 24 banks that utilize the InterSwitch platform to service their e-payment market, only 10  were reported to have supported the project and they are Bank PHB, UBA, Zenith Bank, Intercontinental Bank, and Spring Bank. Others include Union Bank, Oceanic International Bank, and Wema Bank.

The Cardholders Awareness Campaign bankrolled by InterSwitch and other participating banks according to Mr. Mitchell Elegbe, Chief Executive Officer, InterSwitch is designed to achieve three objectives. Firstly, to educate the cardholders on the importance of protecting their PINs and to create awareness on card usage without generating unnecessary panic in the minds of cardholders and thirdly to enlighten cardholders of channels on which their cards can be used other then just cash withdrawals at ATMs. However, the current travails the system is throwing up is operators' inflicted, said Tunji Aregbesola, a journalist and financial technologist.

“The acclaimed world-wide way of easing financial transactions is being abused in the country by “the Nigerian factor bug,” added Akogun. He said the House expected the committee's report to make appropriate recommendations that would protect bank customers and their transactions. “It is one of the reports we are expecting to be laid on the table; it is hoped that it will address the issue squarely he stated.”

Recently, a student of Ambrose Ali University, Ekpoma was arrested for N34 million ATM frauds in Edo State.

According to Mr. Ehimea, self-confessed ATM fraud whizkid, “One morning that I needed to cash money from the bank with my Access Bank visa card, I spotted the faulty machine. I discovered that each time I withdrew money my account would not be debited, so I just kept on withdrawing.

“But each time I withdrew some money, my account was credited again. I was always scared, but I would collect it, rush back to the banking hall and re-credit my account. I did this several times that I could not even remember.”

Customers in another instance get debited when the actual transaction has not been done. According to a customer of GTBank who pleaded anonymity, “it happens that I used my GTBank ATM in Skye Bank machine, but when I couldn't withdraw money, I later check my account and what I got was that my account had been debited in the tune of the cash I had wanted to withdraw. However this abnormally was redressed when I visited my branch,” he added.

Many of these cases abound everyday, while banks keep rolling out ATMs and counting numbers being deployed as marketing strategy, issues arising from fraud and faulty equipment are less given attention to.

Now that the House of Representatives has risen to  defend the helpless customers whose hard earn money are being 'stolen' due to lapses attributed to banks' faulty machine, it is imperative to ask who is to blame, fraudsters or banks?