EFCC slams Banks, Fintechs over due diligence lapses as N18.7bn fraud hits 900,000 Nigerians

The Economic and Financial Crimes Commission (EFCC) has accused banks, fintech companies and microfinance institutions of enabling large-scale fraud through failure to conduct basic customer due diligence, warning that negligence within the financial system is fuelling massive financial losses across the country.

The allegation was made on Thursday in Abuja by the Commission’s Director of Public Affairs, Mr Wilson Uwujaren, during a media briefing on the outcome of investigations into two major fraud schemes that reportedly affected more than 900,000 Nigerians.

Uwujaren disclosed that EFCC investigations revealed that a “new generation bank,” six fintech firms and several microfinance banks compromised standard banking procedures, allowing illicit funds to be converted into digital assets and transferred to so-called “safe destinations” without triggering regulatory red flags.

“A total sum of N18,739,999,027.35 passed through our financial system without due diligence by banks,” Uwujaren said.

He further alleged that cryptocurrency transactions valued at N162 billion were processed through a single bank without proper Know Your Customer (KYC) checks, while another bank permitted a single customer to operate as many as 960 accounts that were “exclusively used for fraudulent activities.”

According to the EFCC, the funds were linked to two large criminal schemes. The first involved an airline ticket discount fraud in which victims were deceived with fake offers of discounted airfares.

Payments were allegedly structured to appear as if they were made to legitimate airline accounts, after which victims’ bank accounts were drained.

Uwujaren said more than 700 victims lost a total of N651,097,755 to the scheme, although only N33.6 million has so far been recovered and refunded.

Investigations, he added, showed that the fraud was masterminded by foreign nationals who recruited young Nigerians to execute the scheme, using cryptocurrency transactions routed through the Bybit platform to move proceeds out of the country.

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The second fraud scheme was linked to an investment operation involving Fred and Farid Investment Limited, also known as FF Investment, alongside eight other companies.

The EFCC said more than 200,000 Nigerians were defrauded of N18.08 billion through multiple fictitious investment packages.

The companies named by the commission include Credio Banco Limited, Deliberty Rock Limited, Liam Chumeks Global Service, Ngwuoke Daniels Technology, Icons Autos and Import Merchant, Newpace Technology Services Limited, Primepath Ways Ventures Limited, Kaka Synergy Network Limited and Sunlight Tech Hub Services Limited.

Uwujaren disclosed that three Nigerian accomplices have been arrested and charged to court in connection with the investment scam, while the foreign masterminds remain at large.

He issued a strong warning to financial institutions, saying banks, fintechs and microfinance institutions found to be aiding or abetting fraud could face suspension and criminal prosecution.

Uwujaren called on financial regulators to enforce strict compliance with KYC requirements, customer due diligence and suspicious transaction reporting obligations across the financial sector.

“Negligence and failure to monitor suspicious and structured transactions by banks should no longer be allowed,” he said.