First Bank N47m Fraud: Customers Lament, Staff Face 20 Years Jail

For more than 100 years First Bank was for many customers the most trusted bank in the country. In those good times traders, civil servants and artisans relied on the financial behemoth to keep their money safe while they go to sleep with peace of mind.

But things have changed dramatically in recent years considering that keeping money in the bank has become a high risk, so much so that customers must now keep a vigil at all times to ensure that some employees of the bank working with fraudsters did not empty their accounts behind their backs.

The trust deficit has grown to such an alarming rate that thieving staff now take advantage of desperate customers who run to them for help when they observe their accounts are vulnerable to criminals.

Bent on stopping thieving bank employees from this evil act the House of Representatives has started amending the Bank Employees (Declaration of Assets), BEDA Act 2004 which prescribes a slap on the wrist punishment for fraudulent bank staff.

The amendment bill which is currently at Committee Stage has proposed at least a 20 years jail term for bank staff and fund managers who commit fraud on duty.

Speaking a few days ago, Francis Waive, the lawmaker who sponsored the bill said bank employees live ostentatious lifestyles from the ill-gotten money they steal from depositors. The situation must not be allowed to continue, he said, explaining that the level of bank theft has become so alarming.

According to Section 7 (1) of the Act “it shall be an offence for an employee of a bank to own assets in excess of his legitimate, known and provable income and assets”, while section 7 (2) states that a bank employee found guilty of the offence in subsection 1 “shall on conviction be liable to imprisonment for ten years and shall, in addition, forfeit the excess assets or its equivalent in money to the federal government”.

But the new bill seeks to increase the punishment to 20 years, according to checks by the magazine.

Waive said the amendment is necessary to curb the escalating fraud offences committed by bank staff against their customers.

According to him, “it is no longer news that computer fraud, which includes hacking of people’s accounts, forms part of the majority of the fraud perpetrated in our country in recent times and has consistently been on the rise,” he said.

“It is also true that most of the online fraud carried out is perpetuated with bank staff as collaborators, and in some cases involving staff who are no longer in the employment of the bank.

“There are currently a lot of reported cases of fraudulent activities by bank employees which include fraudulent transfers/withdrawals, cash suppression, unauthorised credits and fraudulent conversion of cheques, diversion of customer deposits, diversion of bank charges, burglary and presentation of forged or stolen cheques”.

The lawmaker explained further that some bank employees conive with armed robbers to rob their customers while others clone customers’ identifications with the intention to commit fraud.

He said “Research shows that some bank staff, aside from documentary fraud, sometimes stage-manage robbery or connive with outsiders to perpetrate such acts .

“On further research, it has also been revealed in police investigations on the activities of corrupt bank staff that the fraudsters scout for obituaries of well-to-do members of the public, use bank employees to determine the deceased’s account balance, clone their SIM cards for online transfer, and all sorts.

“The amendment sought on section 7 of the Act is therefore necessary to increase the punishment accrued to a guilty bank employee from a lesser punishment of 10 years imprisonment to a higher punishment of 20 years, to serve as a deterrent to all bank staff from such acts.”

It is difficult to say for now whether the new law will curtail or reduce the incidences of bank employee fraud, but one can easily agree with the suggestion by the lawmaker that some bank staff now connive with criminals to defraud their customers, considering this particular case with First Bank.

Consider this case when a customer ran to First Bank for help after his ATM card was stolen by armed robbers who attacked his residence in Kano.

The first thing that came to his mind after the robbery was to quickly run to his ‘trusted’ bank, who in his mind will do everything to ensure that the robbers did not have access to the money in his account using the stolen ATM card.

But it turned out that the same bank he ran to for help appears not to be different from the robbers who put him in the precarious situation in the first instance.

“It very sad that a bank could turn the problem of a desperate customer into double jeopardy while he’s still grappling with the pain of what armed robbers took from him.

“To think that the bank staff capitalized on the misfortunes of their customer to   hatch their own plan on how to steal money from his account, is indeed unfathomable, crooked and wicked to say the least.

“They were supposed to ensure that his deposit was safe, that’s the very reason he kept the money with them in the first instance. That’s what banks are meant to do. Where else could he have run to after robbers took his ATM, if not his bank? Adedeji Ismail, a customers’ expert said.

The very intriguing story started last year’s February 6 when Mailafia Mohammed was attacked at his residence by suspected armed men, who after robbing him of his valuables also dispossessed him of his mobile phone.

Jolted by the incident and the fear that the robbers could hack into his phone to obtain information on his bank account, Mohammed quickly ran to his branch to inform them of his problem and the need for the bank to block the account, because as he noted the robbers had ulterior motives for taking his phone away.

On his arrival at his branch in Kano, he explained what happened to the branch manager who told him there was no cause for alarm, and that he should continue to use the account.

“At this time, one would have expected the bank to do all that is necessary to flag the account in case anybody wants to gain access to it. This is so because the customer had already raised an alarm which should have prompted the bank to act, particularly considering that the account contains a huge amount,” Ismail said.

From all indications, the bank did not take any preventive action even after the manager had told  the customer to go home that the problem had been taken care of. It was based on that assurance that Mohammed went back to the bank, 12 days after to withdraw money from the same account.

What happened shocked him, to the extent that those who knew him said he almost fainted after he learnt that a huge sum had been withdrawn from his account.

The account had been drawn down by a whopping N47 million barely two weeks after the bank manager assured him that his deposit will not be tampered with.

“What happened after the customer lodged an official complaint clearly showed two things; it is either some employees of the bank are working together with the robbers; it could also be that the bank did not act when the customer went to them for help. Either way, the bank management cannot absolve itself of culpability considering the manner the theft was executed. Besides, it will not be difficult to begin to connect the dots,” said Toyin Kadiri, a forensic expert in Lagos.

The expert is right because it was later discovered that those that stole N47 million from the account  were not outsiders but two employees of the bank.

How did they carry out the insider ‘operation’? No sooner Mohammed reported to the bank that his phone had been stolen, the two staff quickly went to work by obtaining all the information concerning the customer after which they also obtained an Automated Teller Machine, ATM card which they used to withdraw the money.

Whether the crooked staff committed the heinous act in connivance with the manager, no one can tell, but those that know said what happened is laced with so much coincidence that it will not be difficult to begin to connect the dots.

The long, cold hands of the law have already caught up with the thieving staff who are now being prosecuted by the Economic and Financial Crimes Commission, EFCC but experts are still worried that the bank may not have what it takes to safeguard  customers’ deposits when criminally minded staff and outsiders strike.

The thinking in the sector is that this case has further proven what the management of First Bank is not doing right when it comes to holistically safeguarding customers’ deposits.

Keen industry watchers also insist that the situation may have further eroded the semblance of confidence that some customers still have in the over a century old bank.

Many customers are also asking how much background checks are performed before people are employed to various sensitive departments in the bank.

The manner the Adeduntan-led management  responds to these questions, experts insist, would determine whether it is prepared to prevent any further embarrassment to the image of First Bank, Nigeria’s oldest bank, which has been seriously hit by this shameful incident.