Illegal charges, frauds vs integrity of banking



The  financial sector, especially the banking services system, reflects the moral compass of any economy. Where the integrity of this compass is compromised the entire economic system is in great danger.
This is the vibe that confronts the discerning observer of recent developments in the banking industry statistics on its fiduciary responsibilities; in particular, the safety of depositors’ money.

Some recent reports say the banks in Nigeria refunded N23 billion to their customers between January and November 2018, against the backdrop of about 2.75 million complaints on illegal deductions through excess charges, frauds and electronic payment errors.

The Consumer Protection Department, CPD, of the Central Bank of Nigeria ,CBN, which disclosed this in its report for the period also indicated that the banks resolved 1.97 million or 71 per cent of the total complaints from where they refunded N23.13 billion, $2.32 million, Euro 11, 355, and £49,243 to the affected customers.
We note here that these figures, as staggering as they appear, represent minority cases. We have it on good authority that far more cases go unreported. The amount of money lost to successful cheating and fraud in the banks is far more than the refunds recorded.
To worsen matters, the regulatory authorities are projecting that losses arising from electronic banking fraud would balloon in the years ahead, as online banking becomes more prevalent. In fact, even the current official figures allude to this danger.
An analysis of the CBN’s Consumer Protection Desk report shows that electronic payment-related complaints amounted to 2.27 million, representing 80 per cent of total complaints. It was followed by fraud-related complaints which accounted for 50,555, while complaints relating to excess/unauthorised charges stood at 26,332.
It went further to state that the average number of electronic payment-related complaints rose to 244,000 in just two months (October and November 2018) against 180,000 in the first three months of this year.
It is time for the regulatory authorities to do more. They should beam their searchlight on malpractices involving members of staff of banks who were either dismissed or had their appointments terminated on the grounds of fraud. We know that big ticket perpetrators do willingly sacrifice their jobs to get through to their targets.
We are worried that despite the reported efforts by the authorities to curb the menace and clean up the system, the sector, according to the CBN report, is still recording huge rises in cases and amounts involved year-on-year.
It is time the regulatory authorities got more serious. They must show they are not part of the insider-driven sleaze that is set to become a monster over the entire economy.
We must further bolster the confidence of Nigerians in the electronic banking system.

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Credit: Vanguard.