June 2014 Issue

Our 'Newsletter on Financial Fraud' is your monthly insight into the various new fraud types and methods used by fraudsters globally in the banking space.

In this issue, we bring to light the effect of banking fraud creeping in and making banks lose millions to this plaguing menace.

Money Laundering Rampant in Nigerian Banks


The indictment by the Acting Governor of Nigeria's central Bank, Dr. Sarah Alade that Banks have been aiding money laundering, a practice which puts a slur on their integrity, professional and ethical standard did not come as a surprise to keen observers of the Nigerian banking system.

CBN Governor delivered the indictment at a course on Combating Money Laundering and other Financial Crimes organised by the West African Institute for Financial and Economic Management (WAIFEM) in Abuja last week. According to Mrs. Alade, "bank facilities are used knowingly and unknowingly to further the act of money laundering and in most cases to retain the proceeds of such crime" which include, round tripping, financial fraud, capital flight, fake cheques, fake currency minting, advanced fee fraud and insiders abuse.

According to the CBN's report for the first half of 2013, there were 2,478 fraud and forgery cases involving Nigerian banks valued at N22.4 billion. This was higher than 2,300 cases valued at N7.1 billion recorded in the same period in 2012. Details of the fraud in the report included fraudulent withdrawals from customers' accounts, suppression and conversion of customers' deposits, theft, illegal funds transfer, cheques defalcations, and fraudulent ATM withdrawals.

Most alarming aspect of the increasing fraud cases in the banks is growing cases of fraud aided by banks' staff with no less than 498 such cases reported by the NDIC representing 39 percent of the total bank fraud cases reported in 2011. It is disappointing that the banks are slacking their guard in corporate governance thereby allowing the escalation of fraud increasingly aided by bank staff at a time when studies reveal that more Nigerians are patronizing the banks as a result of increased confidence in the banks. Indeed, there is urgent need for banks in the country to undergo internal cleansing with a view to ridding themselves of bad eggs so they do not take Nigerians back to the dark days when sharp practices and customer rip off was the order of the day.

Source: All Africa

'Electronic pick pocketing' looms as next threat in credit card fraud, police, security experts say


Identity theft doubled from 2012 to 2013 and police are concerned about "electronic pickpocketing" as organised criminals get smarter and take advantage of weaknesses in Australians' defences.

A study shows credit application fraud is at its highest level since 2009 in Australia, and the main reason is the growing technical skill and innovation of organised criminals.

Queensland fraud detectives have warned the ABC that identity thieves may exploit contactless credit card technology in order to wirelessly pick people's pockets.

They say all it takes is a little technical know-how and a $130 trip to an electronics store to give a potential criminal the tools to steal card details in this way.

The warnings about the rising tide of credit-card theft come after Victorian police said on Wednesday that contactless credit cards were one of the main drivers behind the rise in crime rates in the state last year.

Contactless cards vulnerable to hacking since the cards use radio-frequency identification (RFID) technology, which is vulnerable to hacking.

A source said while the majority of the credit-card information is encrypted, the card number and expiry date is vulnerable. "What that means is it gives potential for card cloning and identity takeover if you know your target."

Source: Yahoo Australia

Banks under cyber attack threat, reveals survey


PricewaterhouseCoopers’ (PwC) 2014 Global Economic Crime Survey suggests that banks are an increasingly desirable target for cyber terrorists and hackers. Nearly 40 per cent of financial sector respondents said they had been victims of cybercrime, compared with 17 per cent in other industries.

“Online offences such as money and identity theft are the most common and profitable strategies used by cyber criminals,” said a source. “However, cybercrime syndicates are now using even more sophisticated attacks to defence systems put in place by organisations and nations and these need to be tracked accurately with robust defence mechanisms against these syndicates.”

According to the PwC survey, the most common cyber threats in the region target applications, systems and networks. But mobile devices, removable storage devices and data held by third parties are also at risk.

“Threats are getting more sophisticated and advanced targeted attacks such as APTs are now being launched towards financial services firms. In this IT security context, many of them in the region are now rethinking their IT security strategy and replacing their legacy firewalls both to meet the higher throughput requirements and to tackle the growing number and complexity of threats,” quoted another source.

The UAE has been tightening its cyber security net, becoming a leader in this area, not only in the Gulf but globally as well. The country’s stance on cyber security has ranked it number one in the GCC and number four worldwide in 2012, according to a report issued by The International Institute for Management Development, Switzerland.

Source: Khaleej Times

Changing the Indian Banking Fraud Landscape with Real-time Fraud Prevention Technology


Banking fraud is a $3.5 Trillion global menace. In India particularly, the number of fraud instances have increased considerably over the past few years. This surge in banking fraud has not only resulted in banks losing millions but also sustaining irreparable reputational damage. With such attacks becoming more frequent, RBI has mandated banks to comply with recommended measures to secure the technology infrastructure and improve fraud risk management practices for frauds across channels. There is thus a growing need for banks to incorporate strong combat mechanism for not only detecting but preventing frauds in real-time.

The infographic below highlights recent fraud trends in the Indian Banking landscape and how implementing real-time fraud management technology would combat such frauds in a fool-proof way.


Indian Banking Fraud Landscape

Source: CustomerXPs

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