Nigerians who use digital financial services are being warned about a type of fraud that exploits trust in customer support rather than necessarily breaking into a bank's systems. PalmPay has cautioned customers against suspicious links, unauthorised transactions and individuals impersonating customer service representatives to obtain sensitive account information. The warning, reported on October 16, comes amid continuing concerns about fraud across Nigeria's banking and payments industry. Figures attributed to the Nigeria Inter-Bank Settlement System (NIBSS) indicate that financial institutions lost ₦25.85 billion to fraud in 2025, down from ₦52.26 billion in 2024. The figures provide important context, but they do not establish that PalmPay itself suffered losses of that magnitude or experienced a security breach. The central issue is how customers can distinguish legitimate financial support from fraudulent approaches designed to persuade them to disclose confidential information or approve payments. PalmPay's reported advisory identifies impersonation as a significant risk for users of digital financial services. Fraudsters may contact customers through telephone calls, messaging platforms or social media accounts while pretending to represent a financial institution. According to the report, scammers may promise rewards, offer fictitious refunds or claim they need to resolve a customer's complaint. These approaches can create an opportunity to obtain account credentials, verification codes or other information that could facilitate unauthorised transactions. The advice attributed to PalmPay is straightforward: customers should protect their one-time passwords (OTPs), personal identification numbers (PINs), passwords and verification codes, and independently verify requests involving sensitive account information. The company also reportedly advised merchants to confirm incoming payments through official transaction records rather than relying exclusively on screenshots or messages presented as evidence of payment. These precautions address two different vulnerabilities. Customers can be deceived into providing information or authorising transactions, while merchants can be misled into releasing goods or services without receiving payment. The reported advisory forms part of PalmPay's customer education efforts under its PalmPay Dey For You campaign. However, the original advisory was not independently located on PalmPay's official website for this report. Its precise wording and publication details therefore remain subject to direct confirmation from the company. Data attributed to NIBSS indicate that reported fraud losses across Nigeria's financial industry fell from ₦52.26 billion in 2024 to ₦25.85 billion in 2025. That represents a reduction of approximately 50.5 per cent in the reported financial losses between the two years. The decline is significant, but it does not mean the problem has disappeared. Financial losses remain substantial, and aggregate figures cannot establish how frequently individual customers encounter scams or how much any particular institution loses. PUNCH also reported that social engineering accounted for 47 per cent of fraud volume and was associated with ₦17.84 billion in losses in 2025, citing figures presented at the Nigeria Electronic Fraud Forum in January 2026. Social engineering involves manipulating people into revealing confidential information, transferring money or taking other actions that benefit a fraudster. Unlike an attack that relies exclusively on a technical vulnerability, this method exploits human trust, urgency, fear or the expectation of receiving a benefit. The specific 47 per cent and ₦17.84 billion figures have not been independently verified against the underlying NIBSS presentation for this article. They should therefore be understood as figures attributed to NIBSS in the published report. The broader lesson is that reducing financial fraud requires attention to both technical security and the decisions customers are persuaded to make. Digital banking has made it possible for customers to manage payments and other financial activities without visiting a physical branch. It has also created more opportunities for customers to receive support through apps, telephone calls, messaging services and social media. That variety of communication channels can make it harder to distinguish a genuine representative from an impersonator. A person experiencing a failed transfer, delayed refund or account-access problem may be particularly receptive to someone claiming to offer an immediate solution. A fraudster can exploit that situation by presenting a request for a verification code or payment authorisation as a necessary step in resolving the problem. The danger is not limited to messages containing suspicious links. A convincing caller or social media account may attempt to establish credibility before asking the customer to perform an action that compromises account security. This makes verification important even when a communication appears professional or refers to a genuine transaction. Customers should independently open the official financial app or use a verified support channel rather than relying on contact details, links or instructions supplied by an unverified person. A request to disclose an OTP, PIN or password should be treated as a serious warning sign. Customers should also be cautious about approving transactions they did not initiate or do not understand. The warning also has implications for Nigerian businesses that accept digital payments. Small retailers, online vendors and other merchants may receive payment notifications through different channels. A screenshot can appear to show a successful transfer, but an image alone does not establish that money has reached the recipient's account. Merchants who release products based only on screenshots or messages may expose themselves to avoidable losses. The safer approach is to check the transaction using the receiving account's official records or another reliable payment confirmation method before releasing goods or services. This is particularly relevant when a transaction is urgent or a customer is pressuring a merchant to complete a sale before the payment can be verified. A payment that is pending, unsuccessful or absent from the receiving account should not be treated as completed merely because someone presents an image showing a transfer. For businesses, the principle is simple: payment verification should be part of the transaction process, not an optional check performed only when something appears suspicious. PalmPay's reported warning reflects a broader challenge for financial service providers: customers must be able to recognise legitimate communications and know how to obtain assistance safely. Financial institutions can introduce security features and educate users, but customers also need clear, accessible methods for verifying support requests and reporting suspicious activity. Effective protection involves several layers. Institutions need appropriate safeguards and responsive fraud-reporting systems. Customers need practical guidance on protecting their credentials. Merchants need reliable payment-verification procedures. The reported decline in annual fraud losses is encouraging, but aggregate figures alone cannot show whether every category of fraud is declining or whether customers are becoming better protected against impersonation. A fuller assessment would require information about reported incidents, attempted fraud, successful transactions, recovery rates and the distribution of losses across different types of financial institutions. Those details are not established by the figures cited in the published report. What Customers Should Do When Contacted by Someone Claiming to Represent PalmPay Customers can reduce their exposure to impersonation scams by following several precautions: - Protect confidential credentials: Do not disclose your OTP, PIN, password or verification code to someone who contacts you claiming to provide customer support. - Verify the communication independently: Use the PalmPay app or contact details obtained through an official company channel rather than relying on an unfamiliar link or social media account. - Avoid rushed decisions: Be cautious if someone pressures you to act immediately to receive a reward, obtain a refund or prevent an alleged account problem. - Check transactions directly: Confirm transfers and account activity through official transaction records. - Report suspicious activity promptly: Contact the financial institution through a verified support channel if you notice an unfamiliar transaction or suspect that your account has been compromised. - Review available security settings: Familiarise yourself with the security features provided within the official app. Customers who suspect that they have disclosed confidential information or authorised a fraudulent transaction should contact their financial institution promptly and ask what steps are available to secure the account and report the incident. Several questions remain unanswered by the information currently available. First, it is unclear whether PalmPay issued the advisory in response to a specific increase in impersonation attempts, customer complaints or a broader industry-wide concern. Second, the available report does not provide PalmPay-specific figures showing the number of impersonation incidents, attempted scams, confirmed fraudulent transactions or customer losses associated with these methods. Third, the national fraud figures do not establish how much of the industry's total losses involved digital wallets, bank transfers, impersonation scams or any individual financial institution. Finally, the exact wording and publication details of PalmPay's original advisory require direct confirmation from the company. These gaps do not invalidate the reported safety advice. They limit what can responsibly be concluded about the scale and immediate circumstances of the threat facing PalmPay customers. The immediate priority for customers is to follow basic account-security precautions and use verified support channels when seeking assistance. For PalmPay, further information about the advisory, its customer-protection measures and any available figures on impersonation-related complaints would help establish the specific problem the company is addressing. For the wider financial industry, continued reporting of fraud incidents and transparent publication of comparable statistics would help customers and policymakers understand how the risks are changing. The next important development would be additional primary-source information from PalmPay or NIBSS clarifying the advisory and the figures associated with financial fraud. Until such information is available, the evidence supports treating impersonation as a genuine security concern without claiming that PalmPay has suffered a breach or attributing industry-wide losses to its customers. The central question is whether customers can consistently verify who is contacting them before sharing information or approving a transaction—and whether financial institutions provide the tools and support needed to make that verification possible.