petition efcc nigeria

10 Ways to Identify Legitimate Business in Nigeria

Last Updated on July 25, 2021 by Ope Quadri

There are companies and individuals across the world who wish to run a partnership business with Nigerian-based companies, but the rate of online fraud is a deterrent to many of them. The dastardly act of the online scam doesn’t mean that there are no legitimate businesses in Nigeria.

If you’ve found a fraudulent business, a guide on how to petition the Economic and Financial Crimes Commission is at: https://infomediang.com/petition-efcc

In fact, hundreds of them are spread across the country with physical office addresses and evidence of registration. Details of how to register your business can be found at:

Ways to Identify If A Business Is Legitimate in Nigeria

This guide shows you what to watch out for before dealing with a business and 10 quick searches you can independently carry out to identify a legit business.

They are:

  1. Research the name of the company
  2. Promise of Inheritance
  3. Check CAC Portal
  4. Check spelling and grammar
  5. Loan Application Via Google Form
  6. Check the WHOIS database
  7. Paying Before Claiming A Grant
  8. Security Exchange Commission (SEC)
  9. Director Details
  10. Business Partnership from a foreign country

Research the name of the company

Anyone can be the owner of a company. Most times, internet scammers impersonate a legit company to prove their legitimacy.

When you encounter such, do a quick research about the name of the company, check the company’s registered number on the portal of the Corporate Affairs Commission (CAC).

You can also use the public phone number to search, input the phone number on a search engine to see what comes up.

Also, search for the name of the person who claims to be representing the company. Watch out for anything that doesn’t seem to match.

Call back the phone number to make sure it’s real and you readily can reach the company.

The search will show you a lot of things about the encounter of other business owners with the company or representatives of the company.

The bottom line is lookout for any scam warnings.

Promise of Inheritance

In a report released by the Nigeria Inter-Bank Settlement System (NIBSS), Nigeria lost N5, 000,000,000 to fraud within nine months in 2020.

The report detailed how such a huge amount found its way into account of fraudsters which include fraud techniques, affected demographics, and fraud sources among others.

One of such techniques is a promise of inheritance. Most times, a legitimate business is impersonated by persuading another company to come to claim an inheritance in the vault of the Central Bank of Nigeria (CBN).

CBN is a bankers’ bank, it’s the apex bank. It doesn’t keep or maintain accounts for individuals or private companies.

If you have received any forms of communication in respect of any inheritance claim or lottery win purporting to emanate from the CBN, it’s fake.

The CBN doesn’t keep accounts for private individuals. It doesn’t engage in wiring lottery winnings.

If you’ve been contacted about this, alert the CBN help desk by sending a complaint to: info @ cenbank.org

Check CAC Portal

The Corporate Affairs Commission (CAC) is Nigeria’s agency that registers companies, issues certificates, and maintains data of legitimately registered companies in Nigeria.

To know if a company is legit or not, as it claimed to be, head straight to the CAC search portal. This quick search will reveal the real name of the company, and its address.

To take a step further, do a quick Google search for the address to see the real address. Most times, a fraudulent company uses someone else’s address to legitimize their fraud.

Check spelling and grammar

Another red flag to watch out for is the tenses of the email sent to you. If you notice poor grammatical construction used frequently on a website that appears to be trading as a Nigerian company, it may be one of the fraudulent sites.

It’s important to investigate further before doing any dealings with such a company.

Loan Application Via Google Form

During after COVID-19 pandemic, the government, just like every government across the world, dolled out several billions of naira and dollars as a relief fund for companies and homes that were affected by the pandemic.

During this time, online scam rose in Nigeria, data from the Nigerian Communications Commission (NCC) during this shows that at least 2.5 million Internet subscribers came on board in April 2020

The NCC’s data showed that there were more online activities during this time as eCommerce heavyweights like Jumia, and Google confirmed.

Relying on the data, NIBSS revealed that fraudulent activities increased during the lockdown.

  • Fraudsters attempted attacks: 46,126 times
  • Successful attacks: 41,979 occasions, 91% of the time.

The most prevalent scam during the lockdown was a loan application portal designed by scammers.

What led to most of the successful activities of the online scam during this time is the fact that millions of Nigerians who indoors needed money to survive. Some of them applied for loans on fake applications, thereby giving out their bank details because of the desperation for a COVID-19 loan.

Another report by creditsafe revealed that in the United Kingdom, more than 406,000 people (soaring from 23,213 in 2019) “reported their personal information was misused to apply for a government document or benefit, such as unemployment insurance”

The fraudulent online loan became prevalent during the lockdown. They prey on vulnerable persons who previously have been denied a loan.

If you have applied for a business loan through Google form, you are likely to receive newsletters designed to scam you.

Check the WHOIS database

WHO IS (http://www.who.is/) allows you to check the domain name registrant information and sometimes confirm a business address and contact name.

A genuine company has nothing to hide from the internet, if you can’t find any useful information about a company online, that should be a red flag.

Paying Before Claiming A Grant

Grants are free financial help given to persons or small business owners to meet certain obligations.

When you are asked to pay a certain amount or pay to obtain a form, such a grant could be fake.

There are also fake businesses that apply for grants.

Security Exchange Commission (SEC)

If a company offers financial services like cryptocurrency firms or associated products like stock brokerage, then you should be able to find them through a quick search on the Security Exchange Commission (SEC).

If they do not appear on the SEC website, it’s possibility is that such companies are illegal to provide financial services.

That’s one SEC warned Nigerians against dealing with Pinkoin some months back. Those who defied the warming lost several millions of naira.

Director Details

On the SEC website, you can find company credit reports and director and shareholder details, if a company claims to be offering financial services.

It will also lead you to the legitimate website of a company that will display current and previous appointments, including appointment and resignation dates.

You can also view those companies’ credit reports whether they are still trading or have closed shops.

Don’t deal with a non-existent company in Nigeria.

Business Partnership from a foreign country

So you’ve been contacted by a foreign company for a partnership? It may actually be one of those bad guys out there.

They use the foreign addresses of another company based in the United States, Canada, United Kingdom, Australia, Italy, and other countries around the world.

One of such fake businesses is iBSmartify which launched a fake coin called Pinkoin, details of why Nigerians should watch out for can be found at: https://infomediang.com/inksnation-pinkoin-is-scam

Note that scammers can also impersonate members of the Board of the CBN to make their illegitimate business look real.

References:

  • cenbank.org/AboutCBN/Thelist.asp
  • nibss-plc.com.ng/media/PDFs/post/NIBSS%20Insights%20Fraud.pdf

 

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