He is well versed in information technology and has worked in an I.T company or I.T department of a bank or financial institution at some time. He has been responsible for creating codes and programmes for the operations of e-payment channels like ATM and web platforms. He is the one behind most of the e-payment frauds that have robbed many of millions of naira.
The public may not be aware of this, and the regulators and banks may not want to acknowledge it publicly, but the truth is that the average e-payment fraudster is an insider!!!
The global financial crisis and the banking sector reforms that followed in Nigeria led to the retrenchment of many people in the financial sector. Many of these retrenched staff left with a lot of knowledge about the inner workings of information technology, online-real time operations etc. After the retrenchment, and with no job forthcoming, they decided to deploy the knowledge to defrauding unsuspecting people through electronic payment platforms.
There are also those still working either in banks or in an electronic payment firm, who succumb to the pressure of making extra income through illegal means, and hence exploit the system to perpetrate electronic fraud.
Most of the e-payment related frauds are perpetrated by these ‘insiders’, and the authorities know but they don’t want the public to know, because it might cause them to lose confidence in the security of e-payment platforms.
Recently, a bank with headquarters on Victoria Island lost millions, when one of these ‘insiders’ discovered a loophole in its system, and exploited it along with his friends to defraud the bank.
However, the ‘insider’ factor is not peculiar to e-fraud. Most of the other types of fraud in the banks are perpetrated by or with the help of ‘insiders’, even including bank robberies. In addition to this is the fact that any system operated by human beings will always be vulnerable to insider fraud.
However, it is important to know that some of the guys operating the system or had operated it before are also exploring means to defraud you. It makes a whole lot of difference.
Three factors are critical to attempt and success of ‘insider’ fraud via e-payment channels. These are ignorance of the customers, carelessness on the part of customers or co-workers, and lastly, weakness or loopholes in the system.
The ignorant customer is good for the e-payment fraudster because he will most likely not know how to secure himself/herself from the risks of such fraud. Also he/she may not likely quickly notice that fraud has been perpetrated or have the confidence to defend himself/herself.
Unfortunately, such customers usually discover how ignorant they are, when they go to their bank to complain and they are confronted with barrage of questions, which they find difficult to answer.