Flutterwave In Another Alleged 11billion Fraud As Customers Lose Confident In Flutterwave

Flutterwave’s Security Breach, A Disturbing Trend of Fraud in Nigeria’s Fintech Sector.

Flutterwave, one of Nigeria’s leading fintech companies, has been embroiled in yet another security breach, losing a staggering ₦11 billion ($7 million) to unauthorized transactions. This incident comes just a month after the company obtained a court order to recover $24 million lost to unauthorised POS transactions. The latest breach, which occurred in April 2024, highlights a disturbing trend of fraud in Nigeria’s fintech sector.

According to insiders, the perpetrators illegally transferred the funds to several accounts, possibly using a sophisticated network to conceal the movement of funds. The breach went undetected for several days, as the perpetrators ensured that the deposits remained below limits that would trigger fraud checks.

Flutterwave has stated that no customer funds were lost or compromised, and that the confidentiality of customers’ data remains intact. However, the company’s reputation has been significantly tarnished by this incident, raising questions about its security measures and risk management practices.

This is not the first time Flutterwave has faced such a security breach. In the last fourteen months, the company has reported four incidents of unauthorized transfers, totaling billions of naira. These incidents underscore the growing challenges faced by fintech companies in Nigeria in combating fraud and ensuring the security of customer funds.

The Central Bank of Nigeria’s mandate for all financial institutions to require customers to provide their bank verification number (BVN) or a national identification number (NIN) for account opening by March 2024 was supposed to enhance security. However, the recurring security breaches at Flutterwave suggest that more needs to be done to protect customers’ funds and data.

In response to the latest breach, Flutterwave has initiated investigations and reported the matter to law enforcement. The company has also reached out to request KYC details of the accounts involved and has temporarily restricted these accounts. Flutterwave’s ability to recover the funds and restore confidence in its platform will be closely watched in the coming months.