Fraudsters have stolen over ₦1 billion using BVNs illegally registered for minors, according to NIBSS. With bank staff and agents aiding these scams, funds were funneled through fraudulent accounts. Authorities are investigating, while NIBSS calls for stricter verification and fraud detection to curb rising financial crimes in Nigeria.
Fraudsters have exploited loopholes in Nigeria’s banking system to siphon over ₦1 billion by illegally registering minors for Bank Verification Numbers (BVNs), according to a report by the Nigeria Inter-Bank Settlement System (NIBSS).
The scheme involved compromised bank staff and agents who facilitated the fraudulent creation of BVNs for underage individuals. These BVNs were then used to open business accounts, which served as conduits for illicit financial transactions. In one case, a bank employee allegedly assisted in registering a BVN for a minor and setting up an enterprise account, which later received ₦495.3 million. The funds were quickly withdrawn before authorities could intervene. Similarly, another case saw a banking agent open an account under the name of a bakery, through which ₦507 million was funneled and immediately transferred to multiple accounts to avoid detection.
NIBSS warned that financial fraud remains a significant challenge, with losses due to fraudulent activities increasing by 350% from 2020 to 2024. The report also highlighted other emerging scams, including identity theft involving senior citizens and the use of cryptocurrency platforms to launder stolen funds.
Authorities are currently investigating the role of financial institutions in these fraudulent activities. NIBSS has called for stricter identity verification processes, real-time biometric validation, and enhanced fraud detection systems to curb the growing menace. Regulatory bodies are also working on measures to improve monitoring and prevent the misuse of BVNs in financial crimes.
