Under the new rules, providers must be able to flag and freeze suspicious transactions, while major online platforms will be required to remove fraudulent ads or face liability for consumer losses.

The framework also mandates greater transparency on payment fees, guarantees access to human customer support rather than chatbots, and improves information-sharing between payment providers and banks.

The regulation will now move to formal approval before coming into force.

The post Banks Now Liable for Online Fraud Losses — EU appeared first on Tech Digest News.

TECH DIGEST– Payday is facing accusations of fraud from its customers due to unannounced account restrictions, has responded to the allegations. Favour Ori, the CEO of the company, issued a statement addressing the issue and attributing the customers’ negative experiences to technical glitches.

Ori acknowledged that the company had detected unusual activities on its platform, leading to the imposition of restrictions on approximately 2,000 accounts. He apologized for the recent decline in service quality and assured customers that their funds remained secure. Ori emphasized Payday’s commitment to resolving all platform-related issues and reinstating customer confidence.

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In his statement, Ori clarified the necessity for account restrictions by stating, “As with any fintech, we have established protocols to monitor and suspend accounts suspected of engaging in fraudulent or prohibited activities.” He explained that restrictions were imposed when account security was compromised, suspicious activities indicated potential fraud, or regulatory guidelines and internal policies were violated. Ori stressed that account restrictions were a serious decision, initiated with careful consideration for legitimate customers’ inconveniences. The company would conduct internal investigations and collaborate with affected customers during the resolution process.

Ori also highlighted that Payday’s internal systems had flagged activities contravening their terms of use, resulting in the temporary restriction of 2,000 accounts. He assured that the majority of affected accounts (over 60%) had been reinstated. During the restriction phase, unaffected accounts continued to transact smoothly with Payday’s virtual VISA/Verve cards and services like bill payments and currency exchange.

The company had encountered service issues with Mastercard, prompting them to sever ties with the provider. Unfortunately, this caused disruptions for customers who used Mastercard on Payday’s platform, as all card-related activities were suspended. Payday decided to discontinue its engagement with Mastercard and offer an alternative card while resolving reconciliation matters. The company was in the process of refunding outstanding card balances to affected customer wallets, with completion expected within three weeks of the statement’s release.

However, some customers remained dissatisfied with Payday’s explanation. Haydar Ahmad, an affected customer, expressed frustration at having his funds locked on the platform for more than 30 days. He criticised Payday for restricting accounts without clear justification and accused the company of scamming its customers.

Despite efforts to address customer concerns, some remained discontented, feeling that their trust had been betrayed.

The post Payday Startup Addresses Fraud Allegations, Account Restrictions appeared first on Tech Digest News.

TECHDIGEST – Electronic-related financial crime is gaining massive ground in the country. Some reports have revealed that the menace have cost Nigerians over N25.5 billion in just four years.

Breaking it down, a non -governmental organisation, the Anti-Corruption Agencies of Nigeria, said each Nigerian loses the equivalent of N35,000 yearly on financial crimes.

It aggregated the loss to amount $18 billion when spread across illicit Financial Crimes like bribery, Internet fraud and non-payment of taxes.

However, the issue has become so worrisome in the Information and Communications Technology, ICT sector, that the Nigerian Communications Commission, NCC can no longer have any of it.

At the weekend, during the Second Quarter Industry Consumer Advisory Forum (ICAF) in Lagos, the commission appeared to hold the telecom operators partly responsible, subtly warning them to improve on their networks’ security architecture or take the blame for the risk and threat posed by the rising menace.

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NCC believes that if the telcos improve on the security architecture of their networks, unwarranted access of such crimes will be effectively blocked.

The commission said unequivocally that it was no longer comfortable with the way Nigerians lose their hard-earned money to fraudsters, who take advantage of the vulnerabilities on their network platforms.

But in a swift response, the umbrella body of the telcos, the Association of Licensed Telecom Operators in Nigeria, ALTON, differed with the commission.

The association did not agree that the network architecture of the telcos has anything to do with the rising menace considering the huge investments operators have made over time in advancing their networks.

Executive Secretary of the association, Mr Gbolahan Awonuga, used the opportunity of a panel discussion on a paper titled: “Combating e-fraud in telecom platforms: Building consumer confidence in the digital economy” to push back the narrative which tends to heap the blame on the doorstep of the telcos.

The post How Nigerians lost N25.5bn to e-fraud in four years appeared first on Tech Digest News.

TECHDIGEST – The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta has highlighted the roles of the commission in combating electronic fraud in the telecom sector and indeed Nigeria’s economy.

Prof. Danbatta gave the highlight today while presenting a keynote address titled ‘Combating E-Fraud on Telecom Platforms and Building Consumer Confidence in the Digital Economy’ at the 2nd Quarter 2023 Industry Consumer Advisory Forum (ICAF) in Lagos.

He said as a regulator, the Commission must establish comprehensive legal frameworks and standards that mandate sound security practices for telecom operators. These legal frameworks, according to him must focus on data protection, privacy and incident response, ensuring that operators are held accountable for any lapses in security on their respective networks.

“The NCC as the regulator of the communications sector has a crucial role to play in combatting e-fraud,” he said.

He disclosed that part of the efforts of the NCC in combating e-fraud include type-approving communications equipment to ensure that they conform to global standards and are interoperable with various relevant technologies.

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In this regard, the Commission collaborates with Mobile Network Operators to ensure the safety of their networks and conducts regular audits and assessments to verify compliance and encourage a culture of cybersecurity within the industry.

“In accordance with the Nigerian Communications Act 2003, telecom operators have a responsibility to ensure the security and integrity of their networks and to prevent it from being used in, or in relation to, the commission of any offense under any law in operation in Nigeria,” he added.

Meanwhile speaking to Journalists on the sideline, Prof. Danbatta admitted that with the increasing uptake of digital financial services and the advent of disruptive technologies, the issue of cybersecurity has become increasingly important.

He advised telecom operators to invest in robust infrastructure, employ state-of-the-art security measures, and conduct regular audits to identify and address vulnerabilities promptly.

“Operators should implement stringent authentication protocols, two-factor authentication and encryption mechanisms to safeguard customer data and prevent unauthorized access,” he advised.

Answering questions from Journalists on the concern about how personal data is collected, stored, shared and exploited, the former University lecturer stated that fortunately, NDEPS 2020-2030 adequately addresses the protection of telecom consumers against the threats of cybercrime, encouraging them to embrace digital finance and supporting them to contribute to the Digital Economy.

“Pillar #6 of the NDEPS, which deals with soft infrastructure, has proven to be proactive. The soft infrastructure pillar focuses on strengthening public confidence in using digital technologies and participation in the Digital Economy.

The pillar will address the importance of cybersecurity and other standards, frameworks, and guidelines that encourage citizens to embrace a digital culture. Data privacy and the deployment of technologies like the public key infrastructure are addressed in this pillar,” he explained.

The post Danbatta highlights telecom regulator’s role in combating e-fraud appeared first on Tech Digest News.

By Kabir Abdulsalam

TECHDIGEST – In many developing countries, the youth population is the largest, and most productive. It has the potential to drive financial growth and inclusion.

Yet, young people face many barriers that hinder their inclusion in economic activities.

Some challenges faced by youth, especially in countries like ours, are limited job opportunities.

This has led to an increase in perpetration of e-fraud, with its attendant effect on various sectors of the nation’s economy.

Citing a CBN report, the Director, Consumer Affairs Bureau, NCC, Efosa Idehen said the apex bank had revealed that e-fraud was costing the Nigerian financial sector staggering losses in monetary terms.

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He said: “As technology evolves, there is a growing concern over the rising trend of fraud perpetrated on telecom platforms across key sectors of the Nigerian economy known as e-fraud.

“This menace which follows wide acceptance of new methods of mobile banking and other payment systems has been discovered to cost the country whopping sums of money.

“The CBN rates e-fraud as the biggest risk in the sector which has widely affected electronic payment solutions such as Automated Teller Machines (ATMs), Nigeria Inter-Bank Settlement System (NIBBS) Instant Payment and mobile banking.”

E-fraud, as a menace, is not only committed in Nigeria, but even in many developed nations.

A report by RiskOps stated that online fraud attacks increased by 233% between 2019 and 2021 in the US.

A key finding in the report is that despite the increase in online transactions by 65%, Florida alone witnessed a 202% rise in in-store credit card fraud.

This was found to be the riskiest state in America for card-present fraud.

The data indicates that the fraud was primarily committed in person in 24-hour convenience stores by criminals using stolen debit card PIN codes.

While Washington DC, New York, and Maryland were the second, third, and fourth riskiest states in the US respectively.

Other electronic methods used to defraud people/customers include through Phishing, Pharming, Skimming, or any other fraudulent means.

Findings show that Nigerian scams cost the British economy at least £150 million a year.

The reality of being a victim of e-fraud is not just about losing money. There are victims who attempt committing suicide; many homes have been broken and a lot of businesses crashed.

Way Forward

The vital question: Is digital wrongdoing or cybercrime the answer for joblessness and destitution in Nigeria? The response is obviously “NO.”

We all need to talk about fraud-related experiences with family and friends in a non-judgmental way.

Nowadays, we must recognise the prevalence of fraud and the ways it impacts individuals and organisations across society. Relevant agencies need to be more proactive in sensitising and educating Nigerians on fraud-related issues.

Above all, Nigeria, as a nation, needs to introduce the use of forensic intelligence to enhance the technique to tackle cybercrime, with high-security gadgets.

Kabir Abdulsalam, writes from Wuye District, Abuja

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