Monday, 6 January 2014

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33 types of bank fraud


HOW NIGERIAN BANKS ROB THEIR CUSTOMERS AND HOW TO PROTECT YOUR SELF FROM DUBIOUS AND ILLEGAL BANK CHARGES. (J.C. ANIEDEH)



It’s no longer News that Nigerian Banks are robbing their customers but the rate at which they do it these days is becoming alarming. My experience as a forensic accountant who specializes in helping bank customers to recover illegal and overcharged bank fees, unpaid or underpaid interests and to adjust inflated loan packages has opened my eyes to the dubious activities that is going on in our banking system today. Innocent bank customers are being robbed everyday by a dubious banking system that capitalizes on the ignorance of their customers as regard to banking rules and regulation to rob them their hard earned money. It is on record that Nigerians are loosing more money to their banks than they loose to armed robbers and area boys put together. My experience also shows that there is no account holders money with any Nigerian bank or financial transaction that involves a Nigerian bank and a customer that is not manipulated against the unsuspecting customer by the bank, especially when such banks discovers that such customer knows next to nothing about banking rules and regulations. There have been cases we investigated and recovered over N400 million from a Nigerian bank which was stolen from a single customer within a 36 months period. Even our government taxes collected by these banks and other government’s money in their custody are not left out. My experience also shows that many bank customers do not know that there are relevant laws that protect them against these excesses by their banks. Another issue is that many of them do not know where or how to seek for help when they suspect or know that their banks are cheating on them, some don’t know that there are modern bank excess charges recovery software that one can programme into his/her account to extract every overcharged and illegal bank fees and inflated interests on loans with ninety-nine percent accuracy. The ignorance of by Nigerian bank customers is what has encouraged the banks to engage in this massive fraud and unwholesome banking practices which has characterized our banking industry today.

Indirect stories are endless as strings ----- are daily being perpetrated in
Banking halls against unsuspecting bank customers. Investigations reveal that bank frauds which vary in nature, character and method of operation are either  against individual and corporate clients or even the government and its various agencies and could be categorized as internal, external and mixed fraud perpetrated by bank staff, external fraudsters and the combination of the two respectively.
Investigations further revealed over 33 ways by which banks perpetrate the heinous crime some of which outright theft and embezzlement to defalcation, forgeries and inside abuse, suppression and fraudulent substitution to tampering with reserve, payment against unclear effects  and unauthorized  lending among others (see the list).
TYPES OF BANK FRAUDS
1.       Outright theft and embezzlement
2.       Defalcation
3.       Forgeries and insider abuse
4.       Suppression
5.       Fraudulent substitution
6.       Tampering with Reserve
7.       Payment against uncleared effects
8.       Unauthorized  lending 
9.       Lending to “ghost” borrowers
10.   Kite flying and cross firing
11.   Unofficial  borrowing
12.   Foreign Exchange malpractices
13.   Impersonation
14.   Teeming and leading
15.   Fake payments
16.   False proceeds of collection
17.   “Influence  of evil forces”
18.   False declaration of cash shortages.
19.   Fraudulent use of bank documents
20.   Fictitious accounts 
21.   Ledger cards manipulation
22.   Misuse  of suspense accounts
23.   Manipulation of vouchers
24.   Dry posting
25.   Over invoicing
26.   Over/under valuation of properties
27.   Inflation of statistical data
28.   Duplication of cheque books, drafts, stamp, etc.
29.   Interception of clearing cheques
30.   Interception and switching of telex messages
31.   Fictitious  contracts
32.   Laundering and
33.   Computer frauds


Yet, banking is a business essentially based on trust. What then could induce Nigerian banks to continuously and deliberately undermine the trust of their customers? Could it be that returns on legitimate business transactions were insufficient to justify the huge growth of share capital and deposits? Were they attempting to conceal poor risk exposure by cheating the vast majority of their clients –the weak and silent majority – in order to make up for the losses they might have incurred in their transactions with a few influential and well-connected individuals? From lessons in Strategic Studies one learns that if someone or a group continues to behave in a manner that is not in its own interest, in the long run, then the answer for the behaviour can be found by asking two cardinal questions: Have the individuals lost their senses? The obvious answer to that is NO. None of the bank managers already indicted, or about to be indicted, appears fit for the straight jacket. On the contrary, watching them at various fora, it is clear that they are of sound mind and body. That leads to the next question. If they have not taken leave of their senses, what would have to be true before the evidence before us makes sense? Bankers simply don’t abuse the trust of their clients without a reason. What are the reasons?
 That called for a return to the staring line –the year the consolidation policy was announced. From there we will retrace the road that led to the hell in which we find ourselves. Right now, banking, which ordinarily should have been an economic/financial matter has become political and ethnic issue as well and it is now constituting another threat to the nation –on many fronts. Yet, we need to understand how we got into this mess that is threatening to tear us apart –as if we don’t have enough problems.

2 comments :

  1. i stumbled on your site today and the contents sent goose pimples all over. please explain more of these terms or inbox me where to get detailed information on; TYPES OF BANK FRAUDS
    1. Outright theft and embezzlement
    2. Defalcation
    3. Forgeries and insider abuse
    4. Suppression
    5. Fraudulent substitution
    6. Tampering with Reserve
    7. Payment against uncleared effects
    8. Unauthorized lending
    9. Lending to “ghost” borrowers
    10. Kite flying and cross firing
    11. Unofficial borrowing
    12. Foreign Exchange malpractices
    13. Impersonation
    14. Teeming and leading
    15. Fake payments
    16. False proceeds of collection
    17. “Influence of evil forces”
    18. False declaration of cash shortages.
    19. Fraudulent use of bank documents
    20. Fictitious accounts
    21. Ledger cards manipulation
    22. Misuse of suspense accounts
    23. Manipulation of vouchers
    24. Dry posting
    25. Over invoicing
    26. Over/under valuation of properties
    27. Inflation of statistical data
    28. Duplication of cheque books, drafts, stamp, etc.
    29. Interception of clearing cheques
    30. Interception and switching of telex messages
    31. Fictitious contracts
    32. Laundering and
    33. Computer frauds

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