EMPLOYEES OF NIGERIAN BANKS AND THEFT OF CUSTOMERS' MONIES

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.