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Globalization and Information and Communication Technology (ICT) took the world by storm and this has posed great challenges to the banking industry. Information and communication technology has changed not just the business world but also the world we live in. it has changed the way things are done that today, no matter what you plan to do, whether you will work with people or money, with words or numbers, technology plays an important role. In fact, it has defined the world order with technological breakthrough and advances in telecommunications, speed of equipment and the use of computers, bankers can now use these same link to transmit data. This gives rise to electronic banking which is simply the application of information technology to transmit data from one point to another. The electronic delivery of banking services has grown rapidly in popularity that every bank now realizes that electronic banking has become a basic element of today’s financial service delivery. Garuba (2008).

The global trend in socio- economic growth of countries around the world shows that a high premium is placed on information and technology by organizations, communities and nations. Development in telecommunications and communications networks such as the internet has transformed economic growth and wealth in many countries. Fasan (2007).HTMET

According to heli (2006), banks and financial institutions all over the world were easily adopters of information and technology. Its use for providing services for customers stretches back to the early 80s when magnetic stripe cards where used to provide account services. This was followed in the 90s by the use of dial up access to customers account using software provided by banks in the last few years, and in particular with the wide spread adoption of internet by customers as well as business.

According to Olugbemi (2007) Nigerian banks have started to offer wide range of its products to their customers making use of sophisticated technology. Financial institutions heavily utilize telecommunication as a tool in the efficient management of customers account, data base and transactions. The introduction of electronic banking introduced new legal element into the customer/banker relationship, issues of data securities, privacy, cyber-crimes, e- payment solutions, electronic records, digital/ electronic evidence etc.

According to Luderman (2009), technology has transformed many sectors, the use of technology in banking has brought banking transactions close to their customers. Before the advent of banking reforms in Nigeria, it was frustrating doing business with banks, customers go through hell even when they transact simple banking business, but recently, the use of information and communication technology has dominated the world through the use of electronic banking, banks and other financial institutions use this medium to offer a wide range of bank services from account services and customers relations to selling of various financial products. Transaction can be carried out by Nigerians using their debit card or credit cards.

According to Heli (2006), electronic banking is one area of e- commerce that has proven successful in Nigeria, virtually all banks in Nigeria offers online and real time banking services. Moreover, banks in Nigeria that cannot offer these services are increasingly losing their customers, however, one way where by transactions are more easier is the use of the automated teller machine (ATM).

According to peter and Sylvia (2008), an automated teller machine (ATM) combines a computer terminal, record keeping system, card cash vault in one point, permitting customers to enter a financial firms book keeping system with either a plastic card containing a personal identification number (PIN) or by punching a special code number into a computer terminal linked to the financial firms computerized records 24 hours a day.

ATM is a computerized telecommunication device that allows customers of a bank or financial institution with access to financial transactions, sometimes in locations outside the banking halls, minimizes risk associated with large movement of cash and eases payment of bills, taxes, utilities etc. it usually contains a magnetic strip that stores account information’s.

Since 2007, with increased advancement in technological awareness, all banks in Nigeria have resulted to installation of automated teller machines(ATMS) in their banks to ease the human trafficking in the banking halls. Indeed as from 2008, most, if not all banks made it a regulation in their banks in Nigeria that all customers withdrawing a certain amount of money should do so through their ATM.

According to Santiago and Francisco (2008), recently, most shopping plazas and eateries have ATM installed in their outlets for easy accessibility of cash to their customers, some of these outlets uses point of sales (POS) to settle their customers purchases. It can therefore be easily and safely concluded that the use of ATM has become imperative and rampant within the Nigerian landscape. Currently, Nigeria has about 7300 automated teller machines (ATMS) installed in various bank branches and off bank premises such as shopping malls across the 36 states of Nigeria and connected to the interswitch network. These are currently about 28million Nigerians using the cards at various ATMS deployed by the banks in the last three years, which makes Nigeria one of the fastest growing ATM markets in Africa.

However, although many Nigerians have accepted and commended the innovative e- transact for the elimination of human bureaucracy and management of time, others have continued to distance themselves from civilization based on the compliant of the innovative machines becomes avenue for fraud. Worthy of note is that as usage increases, electronic card crime increases. Every week, hundreds of bank customers across the major cities are finding their deposits or substantial part of it stolen by faceless crooks Afam (2009).

Afam (2009) also ascertained that ATM fraud has taken an alarming proportion and most customers are now afraid to use their cards, there is no doubt that there must be collusion between some bank staff and fraudsters to commit these fraud and for such fraud to be successful. This is one of the reasons why customers are afraid about the security of online transactions. While on the other hand, some customers have not helped matters because of their carelessness or fraudulent nature, all these have given rise to ATM challenges in the banking industry.

This project work examines and assesses the ways by which these fraudsters carry out the fraud affecting our banking industry and customers patronage to banks.

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