PalmPay Nigeria: Fraud Prevention Advisory Issued Amid Social Engineering Scams

• PalmPay Nigeria issued a fraud prevention advisory warning customers about suspicious links and unauthorized transactions.
• The advisory highlighted impersonation scams where fraudsters pose as financial institution representatives to obtain sensitive information.
• Nigeria's financial institutions lost N25.85 billion to fraud in 2025, with social engineering accounting for 47% of the volume and N17.84 billion in losses.
• PalmPay advises customers not to disclose OTPs, PINs, or passwords and to verify all communications and transaction requests.
• The company's guidance is part of its "PalmPay Dey For You" campaign, aimed at customer education for safer digital financial transactions.

Protecting customers from sophisticated social engineering tactics is not merely a matter of good practice but a regulatory imperative.

Digital financial services provider PalmPay Nigeria recently issued a comprehensive fraud prevention advisory, urging its customers to exercise extreme caution against suspicious links and unauthorized transactions. This crucial PalmPay customer security warning, released following the recent Customer Service Week, specifically highlighted the growing threat of fraudsters who impersonate legitimate customer service representatives to illicitly obtain sensitive personal information and deceive users into compromising their accounts.

This specific PalmPay Nigeria fraud prevention advisory arrives amidst a significant and ongoing challenge of digital fraud impacting Nigeria's banking and payments sector, where billions of naira are lost annually. According to data presented by the Nigeria Inter-Bank Settlement System (NIBSS) at the Nigeria Electronic Fraud Forum in January 2026, financial institutions collectively incurred losses amounting to N25.85 billion due to fraud in 2025. While this figure represents a decrease from the N52.26 billion lost in 2024, the persistent threat remains substantial.

A key contributor to these financial losses is social engineering, which accounted for a staggering 47 percent of the total fraud volume in 2025, resulting in N17.84 billion in losses. These social engineering scams financial institutions Nigeria face are characterized by fraudsters manipulating individuals into divulging confidential information or authorizing payments under false pretenses, underscoring the sophisticated tactics employed by cybercriminals in the Nigeria digital bank fraud landscape.

To bolster fintech customer protection Nigeria, PalmPay has provided explicit guidelines for its users. Customers are strictly advised never to disclose their one-time passwords (OTPs), personal identification numbers (PINs), general passwords, or verification codes to any individual. Furthermore, users should meticulously confirm the authenticity of any social media accounts or other communications purporting to represent PalmPay before sharing personal or financial data.

For merchants utilizing the platform, PalmPay recommends verifying all payments through official transaction records prior to releasing goods or services, rather than relying solely on screenshots or messages presented as proof of payment. The company also encourages customers who detect unfamiliar transactions, suspect fraudulent activity, or encounter issues accessing their accounts to promptly seek assistance exclusively through its official customer support channels. This guidance forms an integral part of the ongoing "PalmPay Dey For You" campaign, which is dedicated to educating customers on fraud prevention and promoting safer digital financial transactions.

The recent PalmPay Nigeria fraud prevention advisory serves as a critical reminder for compliance officers and legal teams across all Nigerian financial institutions, particularly within the rapidly evolving fintech sector. The substantial NIBSS financial fraud statistics, especially the high incidence and cost of social engineering scams, highlight an urgent need to re-evaluate and strengthen existing fraud prevention protocols. Institutions must ensure their customer security advisories are clear, comprehensive, and effectively communicated to mitigate risks.

Protecting customers from sophisticated social engineering tactics is not merely a matter of good practice but a regulatory imperative. Financial institutions must review their incident response plans to ensure swift and effective action in the event of a breach or suspected fraud. Proactive measures, such as those outlined by PalmPay, are essential to safeguard against significant financial losses and to avoid potential regulatory scrutiny and penalties, reinforcing the collective responsibility to enhance the security posture of the entire digital financial ecosystem.

Compliance officers and legal teams at Nigerian financial institutions, especially fintechs, should review their current fraud prevention protocols, customer security advisories, and incident response plans to address the persistent threat of social engineering scams and protect against significant financial losses and potential regulatory action.

Source: Original reporting via PUNCH newspaper