Fraudsters Steal N329m Using Images for BVN Enrollment

Fraudsters Steal N329m Using Images for BVN Enrollment

By Ricky Awodi

A new report from the Nigeria Inter-Bank Settlement System (NIBSS) has exposed a sophisticated fraud scheme in which criminals have stolen ₦329 million by manipulating the Bank Verification Number (BVN) enrollment process. This revelation highlights growing concerns over Nigeria’s financial security and the vulnerabilities in its digital banking infrastructure.

How the Fraud Was Executed

According to the NIBSS report, fraudsters exploited weak BVN verification processes by using static images instead of live enrollees. This was done with the help of unscrupulous BVN enrollment agents, who registered images of both Nigerians and foreigners as real individuals.

Key Steps in the Fraudulent Scheme:

1. Fake BVN Enrollment: Fraudsters used still images of people to create fake BVNs, bypassing the requirement for live capture during registration.

Fraudsters Steal N329m Using Images for BVN Enrollment

2. Opening of Bank Accounts: These fake BVNs were then used to open multiple accounts across microfinance banks (MFBs), mobile money operators (MMOs), and payment service banks (PSBs).

3. Rapid Money Movement: The fraudsters moved ₦329 million through these accounts within days of generating the BVNs.

4. Detection and Crackdown: Financial authorities later discovered that many of the BVNs linked to Asians were assigned Nigerian names, making detection difficult. However, once identified, the fraudulent BVNs were deleted, and the agents involved were reported for arrest and prosecution.

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Rising Fraud Trends in Nigeria’s Banking Sector

The fraudulent BVN scheme is just one part of a larger trend of increasing financial fraud in Nigeria. The NIBSS report indicates that total fraud losses surged to ₦52.26 billion in 2024, representing a staggering 350% increase from ₦11.61 billion recorded in 2020.

Key Statistics on Financial Fraud in Nigeria:

Total attempted fraud in 2024: ₦86.36 billion

Actual losses in 2024: ₦52.26 billion (up by 195% from 2023)

Total number of fraud cases in 2024: 70,111 (a 31% decrease from 2020)

These figures indicate that while the number of reported fraud cases has declined, the scale of financial losses has dramatically increased, suggesting that fraudsters are using more sophisticated tactics.

Why Is BVN Fraud a Serious Issue?

The BVN system, introduced in 2014 by the Central Bank of Nigeria (CBN), was meant to reduce financial fraud by providing a unique identity for every bank customer. However, this recent fraud case exposes weaknesses in the system, particularly in biometric verification and agent accountability.

Major Concerns:

Compromised BVN agents: Some enrollment officers colluded with fraudsters, undermining the system.

Lack of real-time verification: The use of static images instead of live biometric capture raises concerns about poor monitoring and verification protocols.

Expansion of financial fraud: If left unchecked, this loophole could enable money laundering, terrorism financing, and large-scale identity theft.

CBN’s Response and Efforts to Prevent BVN Fraud

In response to the rising fraud cases, the Central Bank of Nigeria (CBN) has introduced stricter guidelines to curb fraudulent BVN activities. Some of these measures include:

1. Mandatory Reporting: Financial institutions must report fraudulent BVNs to NIBSS within 24 hours of detection.

2. Improved BVN Verification: Banks and fintech operators are expected to strengthen their biometric verification processes to prevent the enrollment of fake identities.

3. Blacklist of Compromised BVNs: Any BVN linked to fraudulent activities will be blacklisted, preventing further use.

4. Prosecution of Fraudulent Agents: Enrollment agents found guilty of fraudulent activities will face legal action and possible imprisonment.

How Customers Can Protect Themselves

As fraudsters continue to develop more sophisticated schemes, Nigerians must take proactive steps to protect their bank accounts. Here are some key security tips:

1. Avoid Sharing BVN Details

Never share your BVN, OTP (One-Time Password), or banking details with anyone, even if they claim to be from your bank.

2. Enable Biometric Authentication

Whenever possible, use fingerprint or facial recognition for transactions instead of just passwords or PINs.

3. Regularly Check Your Bank Statements

Monitor your account activity and report any suspicious transactions immediately to your bank.

4. Verify BVN Enrollment Agents

If you need to enroll for a BVN, ensure that you do so at a recognized bank branch or CBN-approved enrollment center.

5. Report Suspicious Activities

If you suspect fraud, immediately report it to your bank, the CBN’s Fraud Desk, or the Economic and Financial Crimes Commission (EFCC).

Conclusion

The ₦329 million BVN fraud case is a wake-up call for Nigeria’s financial sector. While authorities have taken steps to curb fraudulent activities, financial institutions, regulators, and customers must remain vigilant. Strengthening security measures, holding fraudulent agents accountable, and improving biometric verification systems will be crucial in protecting Nigeria’s banking industry from further attacks.