It
has been reported in the US that bank tellers (i.e. an employee of a bank, whose
job includes the responsibilities of helping the bank customers with their
banking needs, such as depositing a check or making a withdrawal, etc) pose a rising
security risk. According to the report in the New York Times:
"As
concerns over identity theft and foreign cyber attacks rise, customers are
largely in the dark about a growing threat just around the corner: bank tellers
and managers with instant access not only to their critical personal
information, but also to their cash.
Though
much of the focus on bank fraud has been on sophisticated hackers, it is the
more prosaic figure of the teller behind the window who should worry
depositors, according to prosecutors, government officials and security
experts."
The
report further states that the Manhattan District Attorney's office
approximately files at least a case a month against a bank teller. This
indicates that such cases of theft are now common place in Manhattan. In view
of the foregoing, the report by Sahara Reporters highlighted below should be a
cause for worry to many Nigerians, although in Nigeria the scale of theft of
customer's monies by bank employees is unclear or unknown.According to Sahara Reporters “The management of United Bank for Africa (UBA) Plc has ordered nine of the bank's employees to refund N1, 551, 000 before March 30, 2017; these were monies they stole via Automated Teller Machine (ATM) transactions.”
Furthermore, the report states that the order to refund the said monies was allegedly conveyed through the bank’s internal email which is quoted thus:
"Sequel to the huge ATM shortage of
N1,551,000 (One Million, five hundred and fifty-one thousand naira only) in
your BO, which was as a result of your negligence to assigned tasks, you are
hereby required by Executive Management to pay the amount listed against your
name to recoup this loss."
It is not really clear from the Sahara
report if the said loss of money was as a result of theft or negligence. Whether
it is negligence or theft by the employees, the report did not state how the
money was lost but just that they stole the monies via ATM. How did they steal
it via ATM?
In
other climes this would have spurred the banks’ regulator, in Nigeria, the
Central Bank of Nigeria to issue a statement on this report. The bank itself,
UBA several days after the report has neither come out to deny or
confirm the story or clarify any issue reported in the story. Since the report
did not say how the money was stolen through the ATM by the employees we
are left to speculate on how they reportedly stole the monies via ATM.
One way through which bank employees,
especially the ATM custodian who is a bank staff that maintains an ATM, is
responsible for loading cash into the ATM and also checking that the notes are
not torn, damaged or dirty, etc., can steal money via ATM is to take from cash
meant to be loaded into the ATM or excess cash left in the ATM as a result of
ATM partial or non-dispense error.
In the case of AJIBOYE vs. FEDERAL REPUBLIC OF
NIGERIA ((2014) LPELR-24325(CA), the appellant as ATM custodian and
employee of GT Bank Plc, GRA, Ilorin branch, was convicted and sentenced for
theft and criminal breach of trust of the sum of N25,000,000.00 belonging to
his employers, entrusted to him and meant for loading and dispense at ATMs in
the bank. He appealed against the conviction and sentence but his appeal was
found to be lacking in merit and consequently dismissed. In his confessional
statement he stated how he carried out his criminal acts and same is reproduced
at page 47 of the judgement thus:
"My modus operandi. During weekends I
will go to office with the pretext to load cash into ATM and at this point I
will take money into the cash bag that contain (sic) the keys of the ATM. I
will take the cash into my car parked outside the branch. Also during
weekdays I took part of the cash unload, from the machine and deposit (sic)
them into my sister (sic) account and wife (sic) account." (underlining for emphasis)
What did Ajiboye mean
when he said: “…Also during weekdays I took part of the cash unload, from the
machine…?” Was he referring
to cash that failed to dispense or “unload” as a result of ATM non-dispense or
partial dispense error?
The ATM custodian as part of his duties
verifies cash in the ATM by checking the available cash balance against ATM
Electronic Journal records. Electronic Journal is usually an
accurate historical data of transactions that are executed on the ATM as it is
programmed to capture every aspect of withdrawal transaction from the beginning
to the close thereof. If
there are discrepancies between the physical cash in the machine, the physical
cash would be removed and kept in a separate account. Discrepancies do occur
when the ATM fails to dispense cash due to a system failure, glitch or error
but the ATM Electronic Journal records that cash was dispensed during a
withdrawal transaction. For instance if 10 million Naira was loaded into the
ATM and at the end of the day when reconciling and verifying the physical cash
in the ATM it is observed in the Electronic Journal that 9 million Naira was
dispensed which should leave the balance of 1 million Naira, however physical
cash verification shows that 1.2 million Naira is left in the ATM. This
discrepancy means that certain withdrawals failed but the Electronic Journal failed
to record them as failed or unsuccessful or non-dispense of cash but instead captured
them as successful withdrawal transactions. The question then is would the ATM
custodian be honest enough to report such discrepancy or will he take such
excess cash in the ATM cassette knowing that the electronic journal which is
the evidence to be used by the bank in case of a demand by a customer who
suffers ATM non-dispense error, is showing that all withdrawal transactions
were successful and cash was dispensed?
It appears from the records in the case
of Ajiboye earlier cited that he was
not honest and regularly took the excess cash (I think this is what Ajiboye
meant by “unload cash”) in the ATM
cassette and deposited same in his sister’s and wife’s account. In Ajiboye’s
words he said: “during weekdays I took part of the cash
unload, from the machine and deposit (sic) them into my sister (sic) account
and wife (sic) account."
Could this be the method through which
these UBA Plc employees allegedly stole moneys from ATM as reported by Sahara
Reporters?
In ideal situations
when cash does not get dispensed due to mechanical failure of the ATM, the cash
gets collected in a separate cassette or tray in the ATM which after periodical
physical balancing by the ATM custodian is kept in a sundry account of the
acquiring bank (bank whose ATM has been used). Once a chargeback is raised by
the issuing bank (customer’s bank) on receipt of complaint from the customer,
the amount is reversed and the customer gets back the credit. Simply put, a
chargeback in this instance is a reversal of an ATM transaction which is
usually initiated by the bank who issued the ATM card as requested by the
cardholder (customer of the issuing bank).
However, this ideal
situation does not occur all the times. For this reason many Nigerians have
suffered from ATM non-dispense or partial dispense error when they tried to
withdraw money from the ATM. ATM non-dispense error is a situation where a customer
performs an ATM withdrawal and his account is debited but cash is not dispensed
and in the case of partial dispense error cash is dispensed but not all of the
cash the ATM user requested to withdraw. Although in majority of cases these
errors are auto reversed or reversed within a few days after occurrence. In fact,
according to paragraphs 1.3(v and w) of the CBN’s Guidelines on Operations of Electronic Payment Channels in Nigeria, 2016, acquiring
banks are to reconcile
and refund all funds
in their possession, belonging to
customers as a
result of ATM’s
non-dispense and partial dispense errors and to also install
appropriate mechanism to immediately initiate refunds without the prompting of
the issuing bank or the customer.
There are also instances
where no reversal is made as occurred in the case of KUME BRIDGET ASHIEMAR vs. GUARANTYTRUST BANK PLC
(GTB) & UNITED BANK FOR AFRICA (UBA) PLC, Suit No: MHC/198/14. The
plaintiff attempted several times to withdraw money via ATM, the ATM did not dispense cash
nevertheless her account was debited and all efforts to get the defendants
to reverse the debits and refund her monies proved unsuccessful. The case is currently being tried at the High Court of Justice of Benue State sitting
in Makurdi.
As earlier stated a lot
of Nigerians have suffered from non-dispense or partial dispense error and this
caught the attention of the Central Bank of Nigeria (CBN) hence in 2014 the
apex bank issued a circular with ref no. BPS/DIR/CIR/01/008 dated
11/6/2014 entitled: Non-Refund of Monies to Customers Short-changed by ATMs’ Non-Dispense or Partial Dispense Error;
directing all deposit money banks to refund to customers all monies trapped in
ATMs due to non-dispense or partial dispense error.
Another method
through which bank employees can steal customer’s money is to gain access to customer personal information, create a fake ATM card in the
name of a customer and use it to withdraw money from the customer’s account. Thus
it was reported by the Bangkok Post that: “Mr Direk (who) had worked for the TMB for more than 10 years…would use
financial and personal information of bank customers to make ATM cards and then
withdraw money from their accounts. The suspect carried out his crime spree for
four years, causing the TMB more than 40 million baht in losses.”
In another reported method, the
ATM custodian can load half of the cash and keep the rest for himself‚ replacing the other
half with fake bank notes.
In conclusion it is
submitted that UBA explains to Nigerians what exactly happened (theft or
negligence) and what measures have been put in place to forestall future occurrences
of theft of customers’ money by their employees through ATM or loss of
customers’ money through ATM due to negligence of their employees to assigned
tasks. This is a delicate matter that affects the confidence of bank customers in
the banking sector and should not be allowed to go into oblivion without proper
explanations.