How criminals use POS to rob residents in Ibadan | Dailytrust

How criminals use POS to rob residents in Ibadan

Main entrance of Alafia Estate
Main entrance of Alafia Estate

Attacks on Point of Sale (POS) operators and the use of the cash machine to rob residents are rapidly increasing in Ibadan, the Oyo State capital.

Residents of Alafia in the Orogun area of the town, last Monday, experienced such disheartening attack as about 20 armed robbers stormed the estate with POS, dispossessing them of various amounts of money.

A victim of the robbery who refused to mention her name for security reasons confirmed that when the network was bad, the robbers took away her Automated Teller Machine (ATM) card with the POS.

At least, four residents of the estate confirmed to Daily Trust Saturday that the robbers went away with their debit cards.

The robbers were said to have gained entry into the estate through the recently dredged carnal linking the area with another community.

According to reports, armed with machetes, guns and other dangerous weapons, the armed robbers grouped themselves in the estate and robbed concurrently.

It was gathered that no fewer than 20 families were direct victims of the robbery. One man who was identified as Peter in House 33 sustained machete cuts on his left hand, while his wife was said to have been beaten with a machete.

Our correspondent learnt that at House 31, where at least 12 flats were attacked, the robbers forced their victims to use the POS they brought, but when network failed, they obtained their PINs and went away with their debit cards.

Our source further revealed that as the robbers moved to House 25, where they were said to have accused some residents of peeping through the window during their last operation in the estate, doors and other properties were badly destroyed as they threatened to unleash hell on them as they battled to break the security fittings.

However, the Oyo State police command, in a statement by its spokesman, Adewale Osifeso, described the story as misleading and undermining.

“The attention of the Oyo State police command has been drawn to a misleading and undermining news making the round about how a group of hoodlums raided the residents of Alafia Estate with POS machines, withdrawing funds in their accounts and disposing them of their properties for about two hours without police intervention,” Osifeso stated

A security expert, Mogaji Wale Oladoja, said Nigerians should not expect the police to inform them, even if they had information on how the robbers came to the area with POS.

“We need to support the police. If they revealed such information it may affect their investigation because many of the people involved will take to their heels. Don’t talk too much on the matter in order to support the police with their investigation,” he said.

Also, on Friday, three armed men attacked a POS operator in Kufeyiji junction, American Quarters, Agodi Gate and took away her N250, 000.

An eyewitness told Daily Trust Saturday that the armed men arrived at the area about 11:30 am and shot a young man in the head.

He said, “The armed men, who had waited for the POS operator, ran after her when they saw her coming. The young woman threw her bag into a fashion designer’s shop, where the armed men snatched the money and shot an electrician working on a ladder.”

Speaking on the possibility and implication of using POS to rob residents, an expert and the head of merchants acquisition unit of Capricorn Digital Limited, Mr Lawal Abass, said armed robbers using the machine to move money was as good as handing themselves over to the police. According to him, all transactions on the machine are traceable because before a POS is issued out by any bank, proper profiling of the customer is done via a detailed KYC.

“The KYC includes applicant’s personal details, such as full address, Bank Verification Number (BVN), transactional behaviour, and in some cases, guarantor’s details.

“This means that for every POS you see out there, there is someone who has committed to be liable in case the machine is used for fraudulent activities. This person is the merchant.

“A line from the CBN cashless policy guideline reads that a merchant shall be held liable for fraud with the card (transactions), arising from its negligence, connivance, among others,’ Lawal explained.

He further said that according to the CBN, such transactions in Nigeria must be compliant to global industry standards, such as Payment Application Data Security Standard (PA DSS), Payment Card Industry Pin Entry Device (PCI PED), Payment Card Industry Data Security Standard PCI DSS, Data Encryption Standards (Triple DES), as minimum standard, and deployed infrastructure must comply with the minimum EMV requirements, which shall be subject to review.

According to him, with all these certifications and proper KYC, it will be hard to successfully carry out robbery with the POS without being traced.

“Another hurdle for armed robbers to contend with is the fact that more than 85 per cent of transactions done on the POS in the merchant’s space are settled into his/her bank account tied to it, 24 hours after the transaction have been done. This means that while the fund will leave the victim’s account immediately, it won’t settle into the POS account until the next day. This gives the victim enough time to complain to his bank and the nearest police station.

“From the transaction details, the account attached to the POS can be identified and the beneficiary bank contacted. The beneficiary bank can put a lien on the account. This means that the account holder would not be able to make withdrawal from the account. Putting a lien on the account may, however, involve getting police report or court injunction. Whichever way, the owner of the account which funds was moved into can always be traced.

“We can, however, not rule out the fact that the POS used by robbers are only used for PIN verification where the actual withdrawal is done at the ATM after leaving the scene.

“In this case, the public is advised to always have their banks’ customer care number handy so they can quickly call immediately the robbers leave. Some banks also have short code that can be dialed to have debit card blocked instantly. So, while the robbers are on their way to the ATM, you are blocking the card already.

“In addition, Transaction Monitoring Solutions allow financial institutions to monitor the transactions made by their customers in real-time or on a daily basis. These solutions not only look at current transactions, but also analyse a customer’s historical information and account profile.”

He continued, “For POS business, an acquiring bank (the bank that gave out the POS), the Payment Terminal App Developer (PTAD), that is the company with the app on the POS, and the Payment Terminal Service Provider (PTSP), are all expected to have a functional 24-hour Transaction Monitoring Solution, where transactions on each POS are monitored to ensure conformity with the profile of the customers and transactional trend.

“When a strange transactional pattern is observed, it is flagged and a lien is placed on the account for proper investigation to be conducted. During this period, the owner of the account attached to the POS would not have access to the fund.

“But the robbers can, however, leverage on the Mobile Money Operators (MMOs) model of financial transaction. According to CBN’s regulatory framework for mobile money services in Nigeria, an organisation other than a deposit bank can be licensed to provide mobile money services in Nigeria, and this includes the issuance of POS.

“Though the guideline also states that all MMOs shall comply with the provisions of the KYC guidelines (CBN AMT/CFT Regulations 2009), the truth is that MMOs do not have the capacity, and at times, the will to get full KYC from their customers like their deposit bank counterparts, especially when it comes to transactional trend of the customers. This is simply because the MMOs do not have customers’ fund with them.

“The level of competition among mobile money operators in Nigeria also means that some have lowered their guard in terms of KYC gathering. This makes their POS easy to get and merchants at times, hard to track.

“The fact that most of the MMOs also operate an instant settlement for their customers means their POS is easy for robbery. This means that the POS owner has access to the fund immediately after the transaction. So an armed robber has the luxury of collecting a POS from an MMO today, and before he completes his KYC, he has used it for robbery, moves the money to another account, drops the machine and gets from another operator for next operation.”

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