By Chibuzor Alli
Digital lender urges customers to verify support channels, protect account credentials and confirm payments as fraudsters exploit trust to target users.
PalmPay has warned customers against fraudsters posing as customer service agents, highlighting how fake refund promises, reward offers and requests to resolve complaints can expose users to financial losses.
The warning comes as Nigeria’s banking and payments industry continues to grapple with social engineering, a fraud technique that exploits human trust to obtain confidential information or manipulate victims into authorising transactions.
In a customer security advisory issued after the recent Customer Service Week, the digital bank urged users to exercise caution when responding to unsolicited calls, messages and online communications claiming to originate from financial institutions.
According to the company, fraudsters may impersonate customer support representatives to obtain account details, solicit verification codes or persuade customers to take actions that compromise their funds.
The warning underscores a persistent challenge for Nigeria’s increasingly digital payments ecosystem: protecting customers not only from technical vulnerabilities but also from criminals who manipulate their confidence in familiar financial brands.
N17.84bn linked to social engineering
Data presented by the Nigeria Inter-Bank Settlement System at the Nigeria Electronic Fraud Forum in January 2026 showed that financial institutions lost N25.85bn to fraud in 2025, down from N52.26bn in 2024.
Despite the decline, social engineering remained a significant threat, accounting for 47 per cent of reported fraud volume and being associated with N17.84bn in losses, according to the figures.
The numbers highlight why customer awareness remains an important component of fraud prevention, even as financial institutions strengthen their security systems.
Social engineering schemes rely on deception rather than necessarily breaching a bank’s technical infrastructure. A fraudster may pose as a support agent, create a false sense of urgency or promise a refund to convince a customer to reveal sensitive information or approve a payment.
For customers, the danger is that an interaction may appear legitimate until confidential information has been disclosed or money has left an account.
PalmPay cautions against sharing security codes
PalmPay advised customers never to disclose their one-time passwords (OTPs), personal identification numbers (PINs), passwords or verification codes to anyone.
It also urged users to independently verify requests involving sensitive information or account activity before taking action.
The company warned that fraudsters could use social media accounts and messaging platforms to impersonate financial service providers, making it important for customers to establish whether a communication genuinely originates from an authorised channel.
Rather than relying on the identity presented by a caller or the appearance of a message, users were encouraged to seek assistance through PalmPay’s official customer support channels.
The advice is particularly relevant when customers are trying to resolve failed transactions, recover funds or address account access problems, situations in which they may be more susceptible to convincing impersonation attempts.
Merchants warned against fake payment alerts
PalmPay also directed attention to payment verification risks faced by merchants, advising them to confirm transactions through official account records before releasing goods or providing services.
The company cautioned against relying solely on screenshots, text messages or other materials presented as proof that a payment has been completed.
Such precautions are intended to reduce the risk of merchants releasing goods based on fabricated or misleading payment confirmations.
For businesses that depend on digital transfers, verifying the actual transaction status provides a more reliable basis for completing sales than accepting customer-provided evidence at face value.
Security awareness becomes critical
PalmPay further advised customers who notice unfamiliar transactions, suspect fraudulent activity or experience account access problems to contact its official support channels promptly.
It encouraged users to explore the security features available in the PalmPay app’s Security Center, keep their credentials confidential and report suspicious activity without delay.
The company said the recommendations formed part of its ongoing PalmPay Dey For You campaign, which includes customer education on fraud prevention and safer digital financial transactions.
The wider challenge for Nigeria’s digital finance industry is to ensure that the convenience of electronic payments is matched by stronger security awareness among customers and merchants.
Although the value of reported industry fraud losses fell in 2025, the NIBSS figures indicate that financial losses remain substantial. The continued prominence of social engineering also points to the importance of helping customers recognise fraudulent requests before they disclose information or approve transactions.
For users, the central lesson is straightforward: a caller claiming to represent a financial institution should not automatically be trusted, and a promised refund or reward should never replace independent verification.
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