GH¢115.52m Lost To Bank Fraud

Dr. Ernest Addison

GHANA’S BANKING industry reported a total number of 2,295 fraud cases in 2019 which translated into a total fraud value of approximately GH¢115.52 million as compared to 2,175 fraud cases reported in 2018.

The fraud cases represented a 5.4 per cent increase in cases reported in 2018.

Of the total values reported, approximately GH¢33.44 million (28.96%) was reported as losses incurred, while approximately GH¢82.06 million (71.04%) was recovered.

Approximately 28.96 per cent (i.e. GH¢33.44 million) of this amount was reported as losses and 71.04 per cent (i.e. GH¢82.06million) was unsuccessful or recovered. The reported total loss value is made up of GH¢10.35 million and a remaining balance of GH¢23.09 million (as at the end of December 2019).

Main Culprits

The 2019 Banking Industry Fraud Report, which made this known, said about 94 per cent of the fraud cases reported as suppression of cash and deposits were perpetrated by staff (either contract or permanent) of the financial institutions, adding that the alarming rate of involvement of bank staff in the perpetration of fraud in the banking sector called for significant reforms in the engagement, remuneration and disengagement processes of employees and contractual staff of financial institutions.

The report also noted that the marginal increase in the number of fraud cases reported might partly be attributed to the improved efforts by the Financial Stability Department to identify, monitor and to ensure compliance with reporting of fraud cases in the industry.

“Also, in recent times, the various forms of advanced technologies adopted by financial institutions have made the banking sector more susceptible to various risks such as phishing, identity theft, card skimming, vishing, email fraud and more sophisticated types of cyber-crime.

“Similar to the year 2018, in 2019, suppression of cash and deposits accounted for the largest portion (77 per cent) of the total number of fraud cases reported to the Bank of Ghana (BoG),” it noted.

RCBs

It continued that rural and community banks reported 55 per cent of the total cases, and commercial banks and savings and loans institutions reported 23 per cent and 22 per cent of the cases respectively. In total, 83 institutions reported cases in 2019, as compared to 72 institutions in 2018.

Cyber Fraud

Fraud cases relating to cyber-crime involved email fraud, crime perpetrated through internet banking and other localized payment and mobile banking platforms. During the year under review cyber fraud cases decreased by 34.48 per cent from 174 cases in 2018 to 114 cases in 2019. However, despite the decrease in 2019, cyber fraud accounted for the highest value of attempted fraud amounting to GH¢50.54 million (with actual loss of GH¢14.31 million).

Cheque Fraud

The number of cheque fraud cases increased marginally by 2.56 per cent from 39 cases in 2018 to 40 cases in 2019. This includes fraud incurred as a result of cloned cheques, stolen cheque leaflets and cheque alteration. Notable however, is the increase in the number of cases reported as cheque cloning, which originates from the operation of syndicates involving staff of financial institutions, telecommunications companies and cheque-printing houses.

Suppression of Cash and Deposits

Suppression of cash and deposit reported in the year 2019 increased by 43.18 per cent from 1,239 cases in 2018 to 1,774 cases in 2019. In 2019, the total value of reported cases under this fraud type was GH¢5.05 million, with a loss amount of GH¢4.07 million. Approximately 93.7 per cent of total reported fraud cases (Suppression of cash and deposits) were committed by staff (contractual or permanent) or other insiders. Staff who suppressed cash or deposits were usually ‘frontline staff’, particularly tellers, mobile bankers or sales agents.

Manipulation and Forgery of Documents

Fraud cases reported by financial institutions regarding manipulation of accounts and negotiable instruments resulted in attempted fraud values of approximately GH¢38.81 million, of which GH¢33.06 million was recovered and GH¢5.75 million was lost. Over 80 per cent of perpetrators for all cases reported on manipulation of accounts and negotiable instruments were staff of the financial institutions. Staff in question mostly manipulated the internal accounts and dormant salary accounts of customers.

BY Samuel Boadi

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