NIGERIAN BANKS AND ADDRESS VERIFICATION- By Stephen Adeosun
Discussing the above, one cannot but tell a little story because hard working but hapless Nigerians have been suffering and are being cheated on daily basis.
Mr John is an Insurance broker in Lagos; he joined a co-operative in order to be able to buy a car. He had about N1.5 million in savings and loans, and looked forward to buying a Toyota Camry saloon car.
He saw an advertisement online “CUSTOM-SIEZED VEHICLES FOR SALE”, he called the number and he was offered a 2010 Toyota Camry for N600,000 only. The car was supposed to be in Kaduna and he was told he had to pay N50,000 only to bring the car to Lagos. He went ahead to pay. Unknown to John, he’s just been conned! 78 other people paid that week into the same account. Most frauds in Nigeria are perpetuated by people who open accounts with false documents, and use it for fraud, money laundering and terrorism.
According to the Central Bank of Nigeria’s, report for the first half of 2013 released on February 19, 2014, the apex bank said there were 2,478 fraud and forgery cases involving Nigerian banks valued at N22.4 billion.
The figure was higher than the 2,300 recorded cases, valued at N7.1 billion in the corresponding period of 2012. “Of this amount, actual loss incurred by the banks was N3.8 billion, representing 17.1 per cent of the total fraud amount, compared with N2.5 billion in the corresponding period of 2012, the amount involved in the fraud incidences also grew from N18.05 billion in 2012 to N21.79 billion in 2013”.
These frauds were perpetuated via fraudulent withdrawals from customers’ accounts, suppression and conversion of customers’ deposits, theft, illegal funds transfer, cheque defalcations, and fraudulent ATM withdrawals, among others. The British Bankers’ Association in her bulletin stated that “to open an account, banks need to know you are who you say you are and you live where you say you live, hence you need proof of identity and proof of address.
In the United Kingdom, addresses are verified by cross checking with the Electoral database, The Electoral database contains the list of all eligible voters` in the UK . From June 2014 residents need to include the National Insurance number on the Electoral Registration form, this has made the register more secure.
A UK National Insurance number is a unique personal number allocated to an individual for life and is used to identify him or her to HM Revenue & Customs and the Department of Work and Pensions.
Also in the United States of America, the nine-digit Social Security Number is needed to open an account.
The circle of validity is clear, without proven identity, a person can not have an NI or SSN, and without an NI/SSN/NID, it is not possible to open an account, without an account, there won’t be fraud.
It is difficult for Nigerian banks to meet the above requirements for all accounts because of the precarious and complicated nature of our identity and address management system.
In an effort to promote and deepen financial inclusion the CBN introduced the Three-tiers KYC (Know Your Customer) policy, which will enable “flexible account opening requirement for low-value and low –risk accounts that are subject to caps and restrictions as the amount of transactions increases.”
In an attempt to further remove the barriers to financial inclusion, the apex bank in a circular referenced: FPR/DIR/CIR/GEN/01/031, dated September 21, 2012, directed banks to accept voter’s registration card issued by the Independent National Electoral Commission (INEC), as a means of customer identification.
The stability within the banking sector and the increased awareness has led to an explosion in new accounts. To be able to meet the CBN guidelines and guard against fraud, Nigeria’s leading banks outsourced address verification to specialist companies.
In the process of putting this article together, Mr. Yemi Abereoje, the General Manager of Yamaguchi Nigeria an Address Verification and Management Company (AVMC) was approached to shed more light. He took his time to describe the process.
According to Mr Abereoje, “AVMC`s should have trained address verifiers with knowledge of the local area and equipped with android tablets and CUG based mobile phones, in specific units in their geographical coverage areas.
Banks should have an effective mechanism for collection of customer’s details; an example is the Bank Address Verification Portal. An online portal will allow Customer Service Officers from all the branches of a bank to upload customers’ addresses in real time.
The AVMC will download the information from the Bank’s portal, the Information will be standardised, validated, spelling-checked, modified if need be and then sent via intranet to address verifiers in their respective states, towns and areas.
The verifiers will locate the address, if the address and the name are correct and the customer lives at the address, then the customer or a representative signs an acknowledgement slip and receives a welcome pack, the verifier then writes a report describing the house and location including the NPC number and then takes a picture.
Stephen Adeoshun sent this from: stephen@yamaguchigroup.net
Discussing the above, one cannot but tell a little story because hard working but hapless Nigerians have been suffering and are being cheated on daily basis.
Mr John is an Insurance broker in Lagos; he joined a co-operative in order to be able to buy a car. He had about N1.5 million in savings and loans, and looked forward to buying a Toyota Camry saloon car.
He saw an advertisement online “CUSTOM-SIEZED VEHICLES FOR SALE”, he called the number and he was offered a 2010 Toyota Camry for N600,000 only. The car was supposed to be in Kaduna and he was told he had to pay N50,000 only to bring the car to Lagos. He went ahead to pay. Unknown to John, he’s just been conned! 78 other people paid that week into the same account. Most frauds in Nigeria are perpetuated by people who open accounts with false documents, and use it for fraud, money laundering and terrorism.
According to the Central Bank of Nigeria’s, report for the first half of 2013 released on February 19, 2014, the apex bank said there were 2,478 fraud and forgery cases involving Nigerian banks valued at N22.4 billion.
The figure was higher than the 2,300 recorded cases, valued at N7.1 billion in the corresponding period of 2012. “Of this amount, actual loss incurred by the banks was N3.8 billion, representing 17.1 per cent of the total fraud amount, compared with N2.5 billion in the corresponding period of 2012, the amount involved in the fraud incidences also grew from N18.05 billion in 2012 to N21.79 billion in 2013”.
These frauds were perpetuated via fraudulent withdrawals from customers’ accounts, suppression and conversion of customers’ deposits, theft, illegal funds transfer, cheque defalcations, and fraudulent ATM withdrawals, among others. The British Bankers’ Association in her bulletin stated that “to open an account, banks need to know you are who you say you are and you live where you say you live, hence you need proof of identity and proof of address.
In the United Kingdom, addresses are verified by cross checking with the Electoral database, The Electoral database contains the list of all eligible voters` in the UK . From June 2014 residents need to include the National Insurance number on the Electoral Registration form, this has made the register more secure.
A UK National Insurance number is a unique personal number allocated to an individual for life and is used to identify him or her to HM Revenue & Customs and the Department of Work and Pensions.
Also in the United States of America, the nine-digit Social Security Number is needed to open an account.
The circle of validity is clear, without proven identity, a person can not have an NI or SSN, and without an NI/SSN/NID, it is not possible to open an account, without an account, there won’t be fraud.
It is difficult for Nigerian banks to meet the above requirements for all accounts because of the precarious and complicated nature of our identity and address management system.
In an effort to promote and deepen financial inclusion the CBN introduced the Three-tiers KYC (Know Your Customer) policy, which will enable “flexible account opening requirement for low-value and low –risk accounts that are subject to caps and restrictions as the amount of transactions increases.”
In an attempt to further remove the barriers to financial inclusion, the apex bank in a circular referenced: FPR/DIR/CIR/GEN/01/031, dated September 21, 2012, directed banks to accept voter’s registration card issued by the Independent National Electoral Commission (INEC), as a means of customer identification.
The stability within the banking sector and the increased awareness has led to an explosion in new accounts. To be able to meet the CBN guidelines and guard against fraud, Nigeria’s leading banks outsourced address verification to specialist companies.
In the process of putting this article together, Mr. Yemi Abereoje, the General Manager of Yamaguchi Nigeria an Address Verification and Management Company (AVMC) was approached to shed more light. He took his time to describe the process.
According to Mr Abereoje, “AVMC`s should have trained address verifiers with knowledge of the local area and equipped with android tablets and CUG based mobile phones, in specific units in their geographical coverage areas.
Banks should have an effective mechanism for collection of customer’s details; an example is the Bank Address Verification Portal. An online portal will allow Customer Service Officers from all the branches of a bank to upload customers’ addresses in real time.
The AVMC will download the information from the Bank’s portal, the Information will be standardised, validated, spelling-checked, modified if need be and then sent via intranet to address verifiers in their respective states, towns and areas.
The verifiers will locate the address, if the address and the name are correct and the customer lives at the address, then the customer or a representative signs an acknowledgement slip and receives a welcome pack, the verifier then writes a report describing the house and location including the NPC number and then takes a picture.
Stephen Adeoshun sent this from: stephen@yamaguchigroup.net
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