Bank Verification Number otherwise known as BVN, has, of late, been a subject of discussion since the news of unsolicited deductions of funds from unsuspecting private accounts owners by certain self-acclaimed financial companies began to make headlines in the news.
The BVN is an 11 digit number that acts as a universal ID in all banks in Nigeria. BVN is like a socio-security number but for the banking industry. It ensures owners can engage in transactions at any Point of Banking operations
Recently news went viral online about a young fraudster who boasted that all he needs to hack into any bank account is the owner’s BVN and the rest will be easy. In a trending video, the young man recounted he uses the BVN on a stolen sim card to transfer money to an “untraceable” account. He said he looks for the bank code of the bank attached to the sim card and then begins his operation.
On how he gets the BVN number, the suspect said he has a code he dials to access that on any sim card he lays his hands on.
On a broader scale, there are many legitimate online financial institutions where unsuspecting users go for financial assistance. These platforms, otherwise known as moneylending outfits, will entice prospects with the coinage that the borrower does not need to provide collateral for the money they intend to borrow.
The campaign comes in various guise such as “Get Loan up To 50,000.00 in 5 minutes With No Collateral.
As enticing as it seems, an online victim who may be desperately in need of funds will click into the offer and fill all necessary forms within minutes and of course, he will get the alert at once, after providing necessary information about himself.
But make no mistake, this information will include your name, bank details, and BVN. In some cases, you will be required to provide debit card information and a card pin. For confirmation purposes, an attempt will be made to deduct as low as N50.00 (Fifty Naira) from your account to ascertain if the account is valid and active. The deduction process will be carried out with the information that has been provided by the borrower. Once the transfer of N50.00 is successful, the borrower gets the credit of the sum he intends to borrow.
After the transaction is successful, the creditor will have all the information about the account of the borrower and may debit the borrower at any time.
There are no exact figures for the number of Nigerians borrowing via digital means. However, data from mobile marketing analytics and attribution platform, showed that Lagos had the highest number of installs for lending apps in Nigeria in 2020 so far, followed by Abuja and Port Harcourt. The venture capital tracking platform, reportedly estimates that currently in Nigeria, there are 184 different lending apps – including genuine apps that are listed on Play Store and App Store.
More than a hundred apps are offering payday loans, and many of them show more than a million installs.
As these numbers continue to grow, awareness about such loan frauds can help one to prevent falling for them.
The operators of loan scams aren’t really interested in timely repayment. They tend to do the opposite, seeking high-risk debtors who, in their desperation to get a loan, are more likely not to examine/investigate the loan app carefully.
This is where they begin to deduct from borrowers’ bank account. The unsuspecting borrowers would have unknowingly signed a waiver in the process of registration for the loan app. Most people just click the part, “I have read and agreed to all terms and agreement guiding the product policy” without actually reading through.
In a situation of this kind, it is difficult for the victim’s bank to take up the case on his or her behalf. The borrower has willingly given up his confidential details, despite the warnings of NDIC and other financial regulatory bodies to avoid given away confidential information such as BVN and bank card details.
There are several such platforms that have come up promising good returns, before revealing the bad conditions applied and then turning ugly with abuses and threats.
The worst is the trending complaints from users that these online money lenders now continue to deduct from their accounts even after making a complete refund of the loan. In the last two months, there has been an avalanche of complaints posted online by victims who have borrowed and refunded their loan, but the so-called loan app companies keep debiting their accounts every month. The bank, after receiving complaints usually makes it clear that they cannot do anything about the transactions.
There’s no doubt that the BVN is a useful idea. It’s like a social security number, for bank accounts.
The digital world includes regular cyber breaches and data theft. The problem with not having adequate data privacy laws is in many folds: Who do we hold accountable when there’s a breach? Have we asked the right questions? How secure is our data? What kind of system is protecting it from illegal access? What constitutes illegal access to this data? Why can’t there be information sharing across the several agencies? After all, we’ve done the National ID card and the NIN, SIM card registration and now, BVN. And still, we don’t have a say in how our details are used.