E-Financial
Forensic Firm, CBN, First Bank Clash Over Fraudulent Charge Allegations in $54.2m Facility
Lensview Consulting Services, a Lagos-based forensic and auditing firm, has alleged bias, open fraud, deliberate cover-up and impersonation of persons by the Central Bank of Nigeria (CBN) in the handling of fraudulent transaction charge refund by Nigerian money deposit banks with First Bank of Nigeria Plc (FBN) as a case in point, according to Quick News Africa report.
Mr. Henry Foss, Managing Consultant of Lensview whose client is a victim of the fraudulent charge, made the disclosure recently.
Lensview had in 2022 approached the CBN on behalf of its clients to compel FBN to refund the sum of $227,235.34, being 0.5% of $554,570.68 as the agreed Bank Guarantee Fee on a $54.2m facility its client requested from FBN. Rather than adhere to the agreed 0.5%, FBN charged Lensview’s client 1% which translated to $554,570.68, and hence the fraudulent excess charge of $227,235.34. “When FBN refused to refund the excess at the agreed rate, based on a long standing offered rate at 0.5%, Lensview had to petition the CBN on the matter and the CBN carefully reviewed the merit of the petition after which it asked FBN to refund the excess amount to the customer with accrued interest as a standing rule,” Foss said.
Instead of honouring CBN’s decision to credit the customer’s account, FBN turned around for several months to find a way to avert the decision by coming up with copy of an email chat purportedly between an FBN employee and the customer’s representative claiming that the Guarantee Fee had been increased from 0.5% to 2%, as an offer condition, which FBN claimed to have been accepted by the customer’s representative. But this unauthorised customer’s representative apparently lacked the capacity to accept such a decision on behalf of the principal nor had the customer’s mandate powers to instruct or authorise payment or drawings on the principal’s account without confirmation and necessary due diligence from the company that officially requested for the facility, with significantly, a minimum of two authorised signatures on its letterhead document for such approvals and payments.
On January 20, 2023, Lensview also wrote to the Governor of the Apex Bank, as a follow-up to the issue of fraudulent perversion, impersonation and miscarriage of Justice by the Consumer Protection Department (CPD), an arm of the CBN in a petition titled, “Reasonable Suspicion, Likelihood of Bias and Cover up By the Director of the CPD in the Appeal of Judgment between Lensview Consulting Services and the CPD with Petition Tracking Number CIM74368/AST involving First Bank Plc,” alleging that there was impersonation of its person, fraudulent neglect and non-compliance on the part of officers of the apex bank.
According to Foss, the transaction was a significantly heavy one such that FBN cannot claim lack of awareness of the fact that for any change of transaction fees to be effective, it must first be communicated to the customer with a letter with evidence of acknowledgement as a proof that the customer is aware of the change.
The forensic and audit firm also noted that FBN was aware that the said customer’s representative does not have the powers or mandate to authorise such transactions, and where he may, as a signatory with mandate powers, it will require at least two authorised signatures over the company’s letter of acceptance on their Letterhead document and not via a chat on phone between two mutual friends.
“Given the facts of the matter vis a vis the practice of banking in Nigeria, it is surprising that the CBN after its earlier verdict that refunds be credited to client, made a sudden u-turn in favour of FBN justifying the fraudulent e-mail received from customer’s staff to conclude that the e-mail suffices as an authority for FBN to take the charge based on instructions from customer’s staff without confirmation from customer’s authorised signatories,” Foss explained, questioning that if the e-mail content sufficed, why did FBN charge 1% instead 2% Guarantee Fee it stated on the email and who negotiated it from 2% to 1%? “Where is the copy of the letter from customer acknowledging the new rate which could have been negotiated or rejected if customer saw it?” Foss asks.
“More worrisome is the CBN’s lack of explanations as to why the email chat between these mutual friends on behalf of their organisations sufficed as an authority to move such a huge amount from the customer’s very busy account in the books of FBN,” Foss notes.
The CBN, in a bid to cover up this fraud, as Lensview pressed harder, in their letter dated 9/1/2023 to Lensview Consulting solicitors wrote that one Mr. Polycarp representing Lensview Consulting Services was invited in an interdepartmental meeting with representatives of the CBN in August 2022, where the said impersonator, Mr. Polycarp, affirmed and upheld the unanimous decisions with the CBN with respect to the fraudulent e-mail from FBN, as correct and sufficient to close the matter.
“This engagement of one purported Mr. Polycarp to stand in for Lensview Consulting Services in the said August 2022 meeting is another fraudulent move by the CBN to cover for FBN on the open e-mail fraud,” Foss said, adding that the CBN, in one of their recent letters to Lensview Consulting, wrote to say they have closed the matter based on the affirmation of the impostor consultant they hired to kill the matter.”
But Foss said that the CBN soon realised that it had erred by engaging an impostor consultant to stand in for Lensview in the said August 2022 meeting, and they quickly wrote back with efforts in futility to invalidate their letter dated 5/1/2023 where Mr. Polycarp the impostor was referred to.
For Lensview, this is a public call for the CBN and it’s co- traveller, FBN to do the right thing and credit the customer the excess charges it fraudulently deducted from the customer.
SOURCE: Quick News Africa
Central Bank of Nigeria (CBN) has announced that diaspora remittances through international money transfer operators (IMTOs) reached $4.22 billion between January and October 2024.
This figure represents a 61 percent increase, or $2.62 billion more than the amount recorded during the same period in 2023.
CBN Governor Olayemi Cardoso shared the figures during an interactive session with the Senate Committee on Banking, Insurance, and Other Financial Institutions at the National Assembly on Wednesday. “The year-on-year increase reflects significant growth,” Cardoso noted.
He also reported that remittances rose from $336 million in September 2024 to $402 million in October 2024 on a month-to-month basis.
Cardoso expressed optimism about continued growth in remittance inflows, saying, “The remittance inflows would continue to rise by the end of the year, given the current trajectory.”
He attributed the surge to improved efficiency in the remittance system, the positive effects of President Bola Tinubu’s policies, and increased trust among Nigerians in the diaspora to contribute to national development.
In addition to remittance updates, Cardoso addressed the state of Nigeria’s external reserves, which he said had grown to $42.01 billion as of December 12, 2024, from $38.35 billion on September 30, 2024.
“External reserves rose largely due to receipts from crude oil-related taxes and third-party receipts in Q3 2024,” he explained.
He added that Nigeria’s external reserves could fund over nine months of goods and services imports, surpassing the international benchmark of three months. “Our external reserves level is a robust buffer against shocks,” Cardoso said.
On the issue of cash shortages, the CBN governor reiterated the enforcement of the new policy imposing a fine of N150 million on any bank branch found distributing new naira notes illegally to currency hawkers.
Cardoso also shared his outlook for the Nigerian economy in 2025. “Distinguished Senators, as we conclude this briefing, I want to highlight that despite the challenges facing our economy, there are clear reasons for optimism,” he said.
“The gradual stabilisation of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”
This comes as the CBN continues to implement measures to strengthen the economy. On October 17, the apex bank reported that remittance inflows had risen to almost $600 million by the end of September, while on June 25, it granted eligible IMTOs access to trade on the official FX window.
The Nigerian banking sector has witnessed a concerning rise in fraudulent activities, with incidents of fraud in bank branches increasing by 31 percent in the second quarter of 2024.
This alarming statistic was disclosed by the Financial Institutions Training Centre (FITC) in its Fraud and Forgeries report, highlighting significant challenges to the integrity of the country’s financial system.
Fraudulent activities in Nigerian banks led to a staggering N42.33 billion in reported losses during the first half of 2024.
This sharp rise was driven by escalating fraud across multiple channels, most notably within physical bank branches.
The FITC report revealed that fraud in bank branches rose dramatically to N42.2 billion in the second quarter, compared to N133.9 million in the first quarter.
The FITC data also pointed to a massive 1,560.3 percent increase in computer and web fraud. Losses in this category surged from N24 million in the first quarter to N400.8 million in the second quarter.
In contrast, mobile fraud witnessed a significant decline, dropping by 59 percent from N216.4 million in the first quarter to N88.7 million in the second quarter.
Interestingly, no cases of ATM-related fraud were recorded during the period under review.
The figures also indicate a shift in fraudulent activities involving various financial instruments. Card fraud saw a notable decline of 47.66 percent, with cases dropping from 21,469 in the first quarter to 11,231 in the second quarter. Conversely, cheque-related fraud rose by 36.67 percent, increasing from 30 cases in the first quarter to 41 in the second quarter.
Mobile fraud recorded an even steeper decline in value terms, dropping by 99 percent from N21.6 billion in the first quarter to N216.36 million in the second quarter.
These figures suggest evolving strategies among fraudsters, with some methods becoming less prevalent while others gain traction.
Amid the rising tide of fraud, legal actions have also intensified. In one notable case, an Abuja Federal High Court issued a 30-day freeze on 818 bank accounts linked to a N10 billion cyberattack on a Nigerian bank.
The court’s directive, issued on October 15, 2024, was based on a motion filed by the police against James Akagwu Isaac and other suspects, including several financial institutions.
Analysts say the surge in fraudulent activities underscores the urgent need for heightened vigilance, enhanced security measures, and robust regulatory interventions in Nigeria’s banking sector.
While the decline in some fraud categories, such as mobile and card fraud, offers a glimmer of hope, the sharp rise in branch-based and web-related fraud highlights the evolving tactics of fraudsters.
To combat these threats effectively, experts recommend that banks must invest in advanced fraud detection systems, conduct regular staff training, and strengthen internal controls.
Collaboration between financial institutions, law enforcement agencies, and regulators will also be crucial in mitigating the impact of fraud and safeguarding the financial ecosystem.
The FITC report serves as a stark reminder of the vulnerabilities within the banking sector and the need for proactive measures to address them. Without sustained efforts, the rising trend of fraud could pose significant risks to Nigeria’s economic stability and the trust of consumers in the financial system.
Credit: Tribune
United Bank for Africa (UBA) Plc said it will utilise the net proceeds of its ongoing N239.4 billion rights issue to invest in additional digital technologies and business expansions that will strengthen the bank’s seven and half decades of impressive performance.
Tony Elumelu, group chairman, UBA,
UBA is offering 6.84 billion ordinary shares of 50 kobo each to existing shareholders at N35 per share. The rights issue is pre-allotted on the basis of one new ordinary share of 50 kobo each to every five ordinary shares held as at November 05, 2024.
The rights issue is scheduled to close on December 24, 2024.
Tony Elumelu, group chairman, UBA, said the primary objective of the ongoing rights issue is to strengthen the bank’s position as a pan-African banking industry leader and a highly rewarding institution for all stakeholders.
He said the group decided on the rights issue to ensure that shareholders continue to derive undiluted benefits from a stronger, more innovative and resilient pan-African banking group.
Elumelu said the rights issue would enable the bank to drive organic expansion and business growth within and outside Nigeria, while strengthening its international operations, adding that UBA recently signed an agreement to commence full banking operations in France.
According to him, with presence in key global financial hubs including the United Kingdom (UK), United States of America (USA), France and United Arab Emirates (UAE), the bank would deepen its global operations by investing more in these global markets and further extend its global reach.
He noted that, “With African subsidiaries contributing more than 50 per cent of the group’s overall performance, the bank would also make additional investments in existing African operations while exploring new opportunities. UBA currently has operations in 19 African countries outside of Nigeria.”
He pointed out that the bank’s expansion plan is driven by its philosophy of developing African businesses, noting that UBA is not only expanding its geographical reach, but also playing a strategic and pivotal role in the economic transformation of Africa as a continent.
He added that while the rights issue would enable the bank to meet the new capital requirements stipulated by the Central Bank of Nigeria (CBN), the net proceeds would put the bank in a better stead to expand lending to small and medium enterprises (SMEs).
He outlined that the bank would make substantial additional investments in technologies to consolidate its reputation as a cutting-edge financial services group and deliver a more robust customer experience.
To him, new investments in information and communication technology (ICT) would further strengthen the group’s digitisation and operational efficiency, thus fostering improving coordination and synchronisation amongst the various entities and delivering improved service delivery and customer satisfaction.
UBA said it plans to strengthen collaboration and partnership with TELCOs and FinTechs to drive technology-enabled initiatives across Africa that will improve intra-trade, remittances, and payments across Africa.
The bank added that it plans to broaden its payment capabilities to enable it to transform the way merchants collect payments by offering solutions that offer seamless, secure and user-friendly ways of managing and consummating transactions.
Elumelu reiterated the bank’s long-term strategy of becoming the undisputed leading and dominant financial services institution in Africa, with greater emphasis on Nigeria.
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