Telecoms platforms are particularly vulnerable to e-fraud due to the large volume of users and the sensitive data they handle. At the instance of the Nigerian Communications Commission (NCC) and Industry Consumer Advisory Forum (ICAF), stakeholders met in Lagos to proffer solution to the rising vulnerability of the vital infrastructure, ADEYEMI ADEPETUN reports
Information Technology has penetrated every sector of our lives in recent times and so are the activities of the fraudsters. Fraudulent activities have occurred in many areas of our daily lives such as telecommunication networks, mobile communications, online banking, and e-Commerce to name just a few.
Individuals, governments, and businesses incur significant financial losses through telecoms fraud. And as a result, fraud prevention and detection have become an important issue to be explored. Fraud is a continuous battle with ever-changing rules of engagement, and therefore effective fraud management requires a specific mindset, approach and strategy.
This is very challenging for individuals, security/information security personnel, businesses and governments alike, as it comes with greater cost. In recent years, the telecoms industry has witnessed better organised and financed criminal gangs operating across international boundaries, who target specific telecoms services to maximise their revenues.
Checks showed that some of the most deftly perpetrated offences with or against telecommunications systems are never detected, not even by their victims. Of those, which are detected, some are concealed from authorities because disclosure could prove embarrassing or commercially inconvenient to victims.
Indeed, at the instance of the Nigerian Communications Commission (NCC) and the Industry Consumer Advisory Forum (ICAF), stakeholders gathered in Lagos for the second quarter edition to dissect the theme: “Combatting e-Fraud on Telecom Platform: Building Consumer Confidence in the Digital Economy.”
According to them, the telecommunications industry in Nigeria has come under intense attacks by electronic fraudsters, who have invaded the sector to cause havoc by capitalising on the vulnerability of the people to defraud them.
As such, the NCC called for stricter measures against this rising menace. It directed telecoms operators to improve on the security architecture of their networks to block unwarranted access to prevent daily exposure of Nigerians.
eFraud phenomenon
Presenting the Keynote Address, the Executive Vice Chairman of NCC, Prof. Umar Danbatta, decried the rising menace. He said this encompasses a wide range of malicious activities carried out via electronic means, including identity theft, phishing, hacking, SIM card cloning and unauthorised access to personal and financial information, to defraud or take advantage of victims. He said these criminal activities might not only cause significant financial losses but also erode consumer trust in the digital ecosystem.
Buttressing how painful the activities of e-fraud could be, Danbatta said he recently lost $5000 of his legitimate earnings to cyber criminals, noting that the networks need to be kept safe for all.
He urged the telecoms operators to upgrade and equip their networks with tools that will make them robust and secure from criminal attacks because of consumers.
According to him, an unsecured network put the personal data of Nigerians at risk, stressing that the idea of the type approval equipment policy of the NCC was due to the need to ensure that they don’t undermine the security and safety of Nigerians.
Danbatta, who said the NCC, as the regulator of the communications sector, plays a pivotal role in combatting e-fraud, called for the establishment of comprehensive legal frameworks and standards that mandate sound security practices for telecoms operators.
These frameworks, he said should focus on data protection, privacy, and incident response, holding operators accountable for any security lapses on their networks. He emphasised that the NCC collaborates with mobile network operators to ensure network safety and conducts regular audits and assessments to verify compliance, fostering a culture of cybersecurity within the industry.
To address concerns about personal data protection, Danbatta highlighted the importance of Nigeria’s National Digital Economy Policy and Strategy 2020 – 2030 (NDEPS). He said Pillar #6 of the NDEPS focuses on soft infrastructure, addresses cybersecurity standards, frameworks, and guidelines.
59% of Nigerians are victims as losses rise
In his welcome address at the forum, NCC Director of the Consumer Affairs Bureau, Alhaji Alkasim Abubakar Umar, said in recent years, the growth of the telecoms sector in Nigeria has been remarkable with increasing access to mobile phones and Internet connectivity and “we have witnessed a surge in digital transactions, making lives more convenient and efficient.”
Umar however, said this rapid expansion has also opened new avenues for criminals to exploit unsuspecting individuals through various forms of electronic fraud.
According to him, some reports have revealed that Nigerians have lost about N12.5 billion to financial crimes linked to the telecommunications industry in the past four years.
The NCC Director, who said this needs to be stopped immediately, added that the Center for Strategic and International Studies (CSIS) estimated that $600 billion is lost to cybercrime each year, an increase from a 2014 study that put global losses at about $445 billion.
Umar also referenced The Guardian story of August 3, 2022, where it was reported that in Africa, the peril of cybercrimes recorded a massive rise in the first six months of 2022, “with phishing and scams hitting 438 per cent and 174 per cent in Kenya and Nigeria, respectively.”
As such, he said eFraud poses a significant threat to the society, as it undermines the trust and confidence in our digital platforms, hampers economic growth, and adversely impacts the lives of our citizens.
He disclosed that as the regulatory authority responsible for overseeing the telecommunications industry, the NCC recognises its duty to safeguard the interests of consumers and protect the integrity of the digital ecosystem.
Referring to the Nigeria Electronic Fraud Forum (NeFF), the lead presenter, Non-Executive Director and Chief Executive Officer, FutureSoft, Nkemdilim Uwaje-Begho, said Nigeria experienced a 63 per cent increase in electronic fraud cases in 2020 compared to the previous year.
According to her, in 2020, the NCC reported over 10,000 cases of telecoms-related fraud, including SIM swap fraud and fraudulent mobile banking transactions.
“Largely, 59 per cent of Nigerian e-Banking customers have been victims of fraud,” she stated.
According to Global Voice Group (GVG), a major provider of world-class IT solutions to governments and regulatory authorities, while quoting the CFCA Global Telecommunications Fraud Loss Survey in 2021, said the total revenue loss due to fraud in the telecoms industry was $39.89 billion, with additional $28 billion lost globally in uncollected revenue.
ICAF blames digital adoption
On his part, the Chairman of ICAF, Mazi Akpa Emeka, said fraud has escalated as digital adoption has increased. He said the situation requires that organisations simultaneously combat fraud and provide customers with a seamless digital experience.
According to him, digital adoption leapfrogged a decade in days during the COVID-19 pandemic, accelerating the shift to digital and multichannel client service that began in the 2010s. He said the pandemic-driven boost to e-commerce is estimated to have exceeded $200 billion in 2020 and 2021.
“Increased digital adoption has enabled new forms of fraudulent activity and amplified the importance of effective fraud management for promoting growth and meeting customers’ increasing expectations for digital experiences. Although most companies have improved their digital user interface and experience, many have struggled to effectively enhance fraud controls without impairing the client experience.
“Many organizations report that they are being overwhelmed by the sheer volume of fraud attempts. In financial services, for example, many banks are so inundated by fraudsters that they cannot meet online origination targets; they are unable to verify identities and authenticate customers while combating fraud,” he stated.
At the same time, Emeka said fraud threat vectors have become significantly more sophisticated. He stressed that these include nation-state actors, organized criminals, cyber terrorists, and insiders, as well as local fraud rings.
“Advances in technology present challenges as fraud attacks occur with greater frequency, speed, and effectiveness. Commonly used methods include phishing (Phishing occurs when a hacker poses as a trusted figure who uses carefully created emails to trick you into visiting a malicious website, downloading a corrupt file or handing over your password before using that information to gain access to a business network or your personal information), destructive malware, social engineering, deep fakes, and fraud-as-a-service exploit kits,” he stated.
Way forward
Uwaje-Begho, said key challenges of eFraud, include evolving threat landscape; increased risk; lack of awareness; lack of collaboration and limited regulations.
Uwaje-Begho said to mitigate the threats, there was a need to build consumer confidence in the digital economy; regulators must implement policies that facilitate collaboration; establishment of formal mechanism for information sharing; encourage public-private partnerships within the telecoms industry as well as cross-sector to leverage expertise.
According to her, international cooperation and information sharing among countries can help curb eFraud; telecoms operators should implement multi-layered security measures; regular security audits, vulnerability assessments and timely software upgrades.
She advised that there should be collaboration with cybersecurity experts and law enforcement agencies, saying that this can help curb eFraud.
Uwaje-Begho there is a need to introduce educational digital and traditional integrated marketing and communications campaigns and initiatives to raise awareness among users about e-fraud risks, safe online practices, and how to recognize and report suspicious activities.
She added that collaboration with schools, universities, associations, networks and community organizations to incorporate digital literacy programs into curricula and member engagement should be encouraged.
