Revealed: Six ways bankers defraud depositors

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Stories of bank staff standing trial or already sentenced for malfeasance or corruptly enriching themselves at the expense of bank depositors abound.

Only last week, a former banker, Ebeneze Alonge, alongside his wife, Olamide, and his mother-in-law, Eunice Isakunle, were convicted and sentenced to 60 years imprisonment on a 12-count charge of conspiracy and stealing, contrary to Section 390(9) of the Criminal Code Laws Cap 16, Laws of Ekiti State, 2012.

Further investigation revealed that there was a turnover of over N21million, deposits from other customers in his wife’s account.

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It would appear that this is not a one-off case, as depositors in various banks were often defrauded of their funds without their being able to identify the means by which the banks they trust with their fortunes, turn around to defraud them of same.

This has kept many members of the public curious, as they endlessly want answers to the question: how does the bank staff manage to fleece unsuspecting customers of their hard earned deposits?

The Point’s findings revealed six major strategies employed by bankers to defraud customers.

They include fixed deposit fraud, signature forgery, cash mix-up, ATM card swap, dormant account scam and cheque deposit diversion.

Bankers in top deposit money banks in Nigeria revealed the different ways by which dishonest colleagues defraud unsuspecting customers in separate interviews with our correspondent. They, however, spoke on the condition of anonymity, owing to the sensitivity of the issue.

FIXED DEPOSIT FRAUD

This should ordinarily be a financial instrument provided by banks, which offers investors a higher rate of interest than a regular savings account. It comes with a tenure, which confers on it a given maturity date.

“Bankers often exploit this by issuing customers a fake fixed deposit certificate together with approved signatures and then crediting their personal accounts instead of that of the customer,” a retired banker, who was in charge of operations in a top five Nigerian bank, told our correspondent.

“There have been cases where the perpetrator invested the money personally, refunded it or absconded with it entirely,” she noted.

SIGNATURE FORGERY

The signatures of customers are unique to each individual customer and the banks obtain this specimen as a code of access and approval to transactions on each customer’s account.

A mainland, Lagos branch manager of a first generation bank told our correspondent that, at physical levels, the customer’s signature offered access to the funds of the account at any given time.

“Some bank employees forge or clone the signatures of customers, especially those with large funds, in order to illegally authorise themselves to move the funds from the account of the customer to their personal or partner-in crime’s account. To do this successfully, the alert services of the customer is blocked, albeit, momentarily, to prevent them from being alerted of the transaction,” he revealed.

CASH MIX-UP

If you are being paid cash over the counter at the bank, you would do well for yourself by counting your cash, before leaving the banking hall.

Why? Some tellers do what is generally referred to as “cash mix-up” when paying customers across the counter.

“They can mix a couple of N500 notes in between N1000 notes when paying customers huge amounts of money and make it look like the cash is complete, whereas lesser notes were put in to reduce the actual amount of money to be paid when counting. This goes unnoticed and happens frequently because of the fact that the customer cannot return the money after it is taken out of the bank,” a banker, who has put in 15 years into the profession, explained.

ATM CARD SWAP

The ATM card is the most common form of electronic signature that unlocks and grants access to customers’ accounts in the banks.

The Point’s investigation revealed that, upon initial collection of the ATM cards, some unscrupulous bank staff could swap the original card, keeping the real one and giving a fake one to the customer for use.

“This way, they have access to the funds in the account without the knowledge of the customer,” an operations manager said.

“SOME BANK EMPLOYEES FORGE OR CLONE THE SIGNATURES OF CUSTOMERS ESPECIALLY THOSE WITH LARGE FUNDS IN ORDER TO ILLEGALLY AUTHORISE THEMSELVES TO MOVE THE FUNDS FROM THE ACCOUNT OF THE CUSTOMER TO THEIR PERSONAL OR PARTNER-IN CRIME’S ACCOUNT… SOME BANKERS EXPLOIT ISSUING CUSTOMERS A FAKE FIXED DEPOSIT CERTIFICATE TOGETHER WITH APPROVED SIGNATURES AND CREDITING THEIR PERSONAL ACCOUNTS INSTEAD OF THAT OF THE CUSTOMER”

DORMANT ACCOUNT SCAM

A dormant account is an account that has had no financial activity for a long period of time. Such accounts may be susceptible to fraud if they contain large funds.

According to one of the bankers, who spoke with our correspondent, some bank workers rely on the fact that, more often than not, customers might have forgotten exactly how much was left in a dormant account or might have forgotten about the entire account for a while.

“What crafty bankers do is to get such an account reactivated and the funds moved to another account without the knowledge of the customer,” the bank official, who preferred not to be named, explained.

CHEQUE DEPOSIT DIVERSION

Cheque deposits usually take up to two days before they are cleared. This can be an opportunity that some bankers exploit to divert the funds of the customer.

“While the customer is still expecting his funds to be deposited, the bank staff could move the fund to his personal or partner-in-crime’s account. However, with the checks put in place by the Central Bank of Nigeria and the various cheque clearing procedures, this is usually easily detected unless in a large corporation where multiple cheques are deposited simultaneously and the confirmation method has loopholes,” another bank official said.

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