Fidelity Bank and the infidelity of fraud [Editor’s pick]

The resurgence of fraud in Fidelity Bank PLC at a high scale showed that something is fundamentally wrong with the commercial bank for a prolong period of time and if not drastically tackled, it could affect the future fortune of the financial institution that will eventually erode the expectations of shareholders of the bank.

The Central Bank of Nigeria (CBN} Financial Stability June 2022 report, published in December 2022, showed how Fidelity Bank was among the Banks with highest record of fraud cases. In the first half of 2022, a record of 26,877 was recorded by Fidelity Bank alongside other commercial banks with 6,047 Bank Verification Numbers (BVNs) placed on the CBN’s watch list for fraudulent transactions. This will undoubtedly place the bank on high risk, even if other contingencies are not envisaged.

Of a total number of BVNs under investigation for fraud, Fidelity has the highest number with an increase of 13.9% of a total of 5,347 as at December, 2021. The cumulative of this include accounts belonging to deceased account owners. The audacity of fraud in Fidelity bank and of course, others is notwithstanding the fact that Fidelity Bank and 27 others were assessed to ensure compliance with the Regulatory Framework for BVN operations and Watchlist for the Nigeria banking industry, according reports obtained by CAPITAL POST on Thursday.

Part of the report read: “2.72 million BVNs were enrolled in the first half of 2022, bringing the total number to 54.65 million. Also, 130.57 million out of 148.46 million active accounts were BVN-linked accounts with Fidelity Bank recorded 26,877 fraud cases.

It is recalled that Fidelity Bank workers in a single swoop, stole customers’ N874 million using 22 Automated Teller Machine (ATM) cards with the case still pending before the Lagos State Special Offences Court in Ikeja. The stealing was made possible with other insider conspirators and system compromise within a period of three days before the lid was blown open.

This has been confirmed by Fidelity Bank’s Information System Auditor, Mr Peter Ige who testified as the second prosecuting witness presented by the Economic and Financial Crimes Commission (EFCC) to testify against the accused staff members in Court.

He told the judge, Oluwatoyin Taiwo, how the four accused persons hacked the bank’s database and cloned more than 22 Automated Teller Machine (ATM) cards to steal N874 million, according to a statement by the EFCC, on Wednesday.
The defendants – Omidiji Joseph, Olusegun Babasola, Abisola Ahmed, Uchechukwu Uma and Jude Aphaeus – are being prosecuted by the EFCC on two counts of fraud involving N874 million they allegedly stole from the bank within three days.

EFCC said the money belongs to five corporate customers – American International Insurance Company Limited (AIICO); Interswitch; OVH Energy Marketing Ltd.; Fidelity Bank Sinking Fund Account and FSL Securities Ltd. They pleaded “not guilty” to the charges. The anti-graft agency presenting Mr Ige as its second prosecution witness on Wednesday Mr Ige told the court how his department was asked to investigate the “massive fraud” in July 2019.
It’s incumbent upon the Fidelity Bank management to constantly guard against infidelity of its staff in order to save the financial institution of this financial embarrassment, even as the management must accept the fact that fraud cannot be perpetuated without insider conspiracy.

It’s also not enough for the Bankers’ bank to churn out reports as it were, but to take a step further in applying punitive sanction against commercial bank management for inexplicable carelessness or administrative supine attitude that led to colossal fraud.