Identity Theft Crisis: A Growing Threat in the Digital Age

As technology continues to evolve, the threat of identity theft has become a significant concern for both individuals and businesses, leading to substantial financial losses. Identity theft involves the unauthorised use of someone’s personal information, such as their name, national identification number, or debit card number, to obtain benefits.

This crime can be perpetrated through various methods, including phishing scams, hacking, and physical theft of personal data. One recent incident involved an individual impersonating Chief Bola Tinubu on Facebook, who was subsequently apprehended by the police. This case underscores the pervasive nature of identity theft and its impact on public figures and ordinary citizens alike.

In Nigeria, the issue of identity theft and fraud has reached alarming levels. In April 2024, Flutterwave, a prominent fintech company, experienced a security breach resulting in the unauthorised transfer of N11 billion ($7 million) to multiple accounts. Insiders suggested that the amount could be as high as N20 billion ($13.5 million). The breach was detected due to unusual account activities, with funds being moved across several financial institutions to avoid detection.

The breach at Flutterwave is not an isolated incident. In March 2023, hackers reportedly stole N2.9 billion ($6.3 million) from the company. This involved unauthorised transfers across 28 commercial banks in Nigeria. Flutterwave initially denied the breach but later confirmed the anomaly and collaborated with law enforcement to investigate and recover the funds. Additional breaches involving cryptocurrency transactions amounting to N450 million have also been reported.

Habeeb Olaosebikan, a tax practitioner, narrated his ordeal with identity theft, highlighting how fraudsters exploit the financial literacy gaps and needs of their victims. Olaosebikan recounted an incident where he was nearly deceived by a social media account impersonating a celebrity. This example illustrates the sophisticated methods fraudsters use to gain the trust and financial information of their targets.

Nigeria’s financial institutions have faced significant losses due to fraud. According to the Nigeria Inter-Bank Settlement System (NIBSS), fraudsters caused a loss of N17.67 billion in 2023. Although the fraud count dropped by six percent to 95,620 cases, the actual financial loss increased by 23 percent compared to 2022. The mobile channel remains the preferred means for fraud, with an increase of five percent over the previous year.

The 2024 Digital Identity Fraud in Africa Report by Smile ID revealed that Nigeria’s National ID was one of the most-attacked documents by fraudsters, ranking ninth in Africa. The report showed that identity fraud in West Africa is largely dominated by Nigeria and Ghana.

To combat identity theft, the Speaker of the House of Representatives, Tajudeen Abbas, announced plans for legislation to regulate artificial intelligence and curb identity theft. Abbas stressed the need for a regulatory framework to manage emerging technologies and prevent their misuse.

Under the Cybercrime Act 2015, identity theft is a criminal offense in Nigeria, punishable by imprisonment or hefty fines. Financial and legal experts advise individuals to take preventive measures, such as safely storing personal documents, shredding old documents, and being cautious of links from unknown sources.

Olusegun Adeniran, a financial lawyer, and Abdulmumeen Ridwan, a financial expert, emphasized the importance of robust verification processes and sophisticated security methods to combat identity theft. These measures include multi-factor authentication, biometric identification, and educating the public on how to protect their personal data.

As technology advances, so do the tactics of scammers. It is crucial for institutions and individuals to stay vigilant and adopt more sophisticated security measures to protect against identity theft and fraud.