A national policy or law enforcing mandatory employee background checks would be the best approach to fighting the growing menace of employee-related fraud and theft cases, a business risk consultant, Harry Baiden, has said.
Commenting on the Bank of Ghana’s latest findings about the increasing incidence of banks’ employee-related fraud, Mr. Baiden said, at least, state-owned institutions and companies which provide services to a section of the public like banks, insurance, telecommunication and saving and loans companies must be made to conduct mandatory background checks on employees.
Statistics from the central bank indicate that the total number of fraud incidents reported to the Bank of Ghana in 2017 increased by 41.66 percent, from 1,001 cases recorded in 2016 to 1,418.
In that same year, the total value for reported fraud/attempted fraud amounted to approximately GH¢190.38million – of which GH¢30million was reported as losses.
The frauds and attempted frauds related to remittance fraud, cyber fraud, cheque cloning, impersonation, forgery, ATM or card fraud, among others.
According to the central bank, the rising fraud cases are compounded by some rogue employees who are in the habit of perpetuating some of these crimes on their own – or acting with the assistance of some criminals outside the banking system.
But Mr. Baiden, who is Managing Director of GAVAC Business Solutions – a business-risk advisory firm – stated that the BoG’s findings represent only a fraction of the incidents being perpetuated by employees across sectors ranging from telecommunications to medical, education and pensions.
“It has been reported elsewhere that insurers lose anywhere from 5-30 percent of their annual revenue through employee-fraud, with larger firms recording between 15-20 percent loss and smaller firms reporting as much as 30 percent.
“Employers needs to develop and implement robust background verification procedures; most organisations are of the understanding that background checks start and end with CID checks.
“This, however, is just one component of the verification process – which ranges from address/residential verification, education, employments, professional references, social media and in some cases a credit reference report. This will give hiring managers a complete picture of the prospective employee and unearth anything a CID report cannot find,” Mr. Baiden stated.