Why it is difficult for banks and the police to help you when you get defrauded; Case Study 2 (Online Payment Method)
Online payment systems are one of the most complex and fast-evolving areas in the financial space.
This is because payment service providers are constantly looking for ways to ensure everyone has the most convenient way to make payments.
Most payment service providers have up to 10 payment options that can be used by different companies and other organizations to receive money.
What does this mean for you as a bank account holder?
Fraudsters have up to 10 techniques they can use to steal your money online.
To know and understand various online payment techniques, you can read these materials I published some months ago;
Understanding Online Payment Systems.
Virtual Bank Accounts; Everything you need to know.
😭Here’s the sad part;
#1. Not having an ATM card does not make you safe.
#2. Not using your ATM card online does not make you safe.
#3. Not using mobile or internet banking does not make you safe.
#4. The requirement for getting defrauded is simply owning a valid bank account with money in it.
That being said, let’s dive into our case study.
I will just use card payment methods to explain how online payment fraud works.
Note that asides from card payments, different online payment methods such as USSD, virtual accounts, pay-with-bank and many more options are available. However, they all have the same goal, which is to get funds to the receiving organization over the internet.
So, let’s assume a fraudster steals your card details. Either by stealing the card physically or manipulating you over the phone or via email to disclose your card information.
They can use the card on a shopping website like Amazon to order some items. But this is sometimes risky for them, as they may be tracked based on the receiving address they provide.
Anti-fraud systems may also prevent them from using the card on sites like Amazon.
So, these days, they use a more effective method.
Most online fraudsters have access to hacked online accounts, such as sport’s betting and savings/investment accounts belonging to victims that may be unaware that they have been hacked.
They may also have access to some of their bank accounts.
Some more sophisticated fraudsters can steal your identity (BVN, sim card, Bank Account information, etc.) and use it to create bank accounts in your name.
The bottom line of all these is to have access to bank accounts and other online accounts carrying other people’s identities. So that transactions carried out there cannot be linked to them.
Let’s take a quick detour.
This is why when your sim card gets stolen, report to your service provider immediately and initiate a sim retrieval, no matter how unimportant that number is to you.
If your bank account gets hacked or you see any unknown transaction on your account, report to your bank immediately.
If you receive a message that an account that you know nothing about has been created, report to the issuing body immediately so that they will be aware that you had nothing to do with that activity.
All of these will help you when an investigation into a fraud case is launched on these accounts.
Back to the main story;
After a fraudster has pulled funds from your account via a savings/investment or a betting website, they withdraw the funds into a bank account bearing the same name and identity on the website.
Since they have access to that bank account, they transfer and split the money through multiple bank accounts they have access to, before finally pulling it out via POS vendors or even using it to purchase cryptocurrencies on a platform with the identity of the owner of one of the hacked bank accounts, then transfer the funds to another or multiple crypto wallets.
In a country like Nigeria or anywhere else in the world, at this stage, it will be literally impossible to follow up this case.
This is why I strongly recommend that you read my handout; Understanding Online Payment Systems and also order a copy of my book; Decoding Cybercrime to better understand how to protect yourself from online related frauds.
The End.
