Mobile money e-cash suppression … a new form of cash suppression by bank employees

Cash suppression in a bank is the act of delaying or restricting or preventing a customer or a bank from having value for a transaction that has been executed on its behalf by an employee of the bank within the stipulated time. Cash suppression is a well-known type of bank fraud perpetrated by bank employees. According to a speech granted by Dr Joseph France, the Director of Financial Stability, Bank of Ghana (BoG),during the lunch of ‘EMP-Verify’, a GAVAC Business Solutions that detects the backgrounds of individuals to mitigate risks in organizations as well as the banking sector, over 90 per cent of fraud-related cases in the banking sector are associated with the employees.

Some types of cash suppression

Teller or Cashier cash suppression

There are two forms of Teller or cashier cash suppression. The first one is where a teller or cashier intentionally decides not to credit a customer account with deposit or cash received from the customer or customer’s agent within the stipulated time, sometimes with the intention to payback later. The second is where a teller or cashier gives out part of the bank’s cash received for the day either from the vault or customers to third parties to trade with the money without any documentation. This is usually done in the morning and the cash returned before the bank closes to the public to enable the teller or cashier to balance. It could be either account holders or non-account holders, but account holders are normally used since they are known to the bank.

Sales or marketing staff cash suppression

This is where sales or marketing staff who usually or occasionally collect cash deposit from customers intentionally pocket some or whole the money sometimes with the intention to payback later. They sometimes pretend to have forgotten to make the deposit on behalf of the customer until the customer detects the fraud. Sometimes they contest the claim of the amount of money the customer may have given them because there was no documentation at the point of collecting the cash. There also instances where customer record books indicate they have money in their bank account, but the money never got to the bank.

Initial deposit suppression

Majority of bank accounts opened today must come with initial deposit. Some cash meant for initial deposit are not deposited until a customer lodge a complaint. Sometimes only part of the actual cash received as initial deposit is deposited into the account. This happens because there seems to be no proper controls in place. I remember somewhere in 2015, myself and a colleague submitted our documentation to open a business account with one of the universal banks in the country. When we requested for the return of our documents because they had delayed in opening the account, they could not trace our initial cash deposit. We eventually had to forgo the money because my colleague once with that bank branch and didn’t want us to report the incident.

How to mitigate cash suppression

Teller or cashier kind of cash suppression can be mitigated by paperless automation of teller or cashier transactions where the teller or cashier will be compelled to key the transaction in the core banking software in order to generate a receipt for the customer. With this system the customer may or may not complete any deposit slip. Surprise supervisor checks is also another way of mitigating especially where tellers or cashiers gives out money to be traded with and then brought back by close of business.

Sales or marketing kind of cash suppression can be mitigated by putting in place a formal cash collection system with proper documentation where customers account is credited by close of business.

Initial cash deposit suppression can also be mitigated by documenting all account books submitted for opening together with the initial deposit whether cash or cheques. The cash is then deposited into an internal suspense account pending transfer to the account when account is opened, and the cheques placed under proper custody pending account being opened.

The bank should also advise customers periodically with their account statement and encourage them to review them to enable early detection of cash suppression.

Mobile money E-cash suppression

Mobile money suppression is the act whereby bank employees usually those who handle the day to day mobile money transactions, transfer e-cash to registered mobile money agents to do their business and payback later. This is usually done in the morning without the mobile money agent paying for the transaction at the point of transfer on the blind side of the bank aided by the teller or cashier and then payback by the mobile money agent before the bank closes its doors to the general public. The mobile money agent will either pay the full amount transferred or pay the difference of what has been used and transfer back the unused portion of the e-cash. What this means is that the bank doesn’t receive value for the e-cash transfer immediately because payment is not done until later in the day or the next day or more. The bank has given out free e-cash for the mobile money agent to trade with. If payment is not made the same day by the mobile money agent, teller or cashier will not balance for that day but this may not be seen or reported if proper checks are not done or if the deal is being aided by a superior officer of the bank or branch because the shortage here is e-cash and not physical cash. Mobile money e-cash suppression may go unnoticed if settlement is made within the day or by close of business. Since the e-cash is not physical cash, supervisors may have the difficult of doing surprise checks on tellers or cashiers during the day. Another difficult is that, in most cases all tellers or cashiers of a bank branch operate from one mobile money e-cash wallet hence a herculean task of detecting who is doing e-cash suppression. E-cash suppression volumes are in the ranges of tens and hundreds of thousands daily and is usually perpetrated in the big banks.

How to mitigate mobile money suppression

  • Verifying transaction execution time

Supervisors, auditors and fraud examiners should always verify the time that the suspected e-cash transaction was keyed into the bank’s core banking software or brought for authorization as against the time the transaction was executed on the e-cash statement.

  • Separate e-cash wallet

Each teller or cashier should have a separate e-cash wallet to enable easy surprise checks by supervisors. With separate e-cash wallets supervisors can easily do surprise checks on a teller or cashier’s e-cash transactions as compared to a situation where all tellers or cashiers use one e-cash wallet.

Know Your Customer and Customer Due Diligence

There should be proper KYC and CDD on all mobile money agents. This may help to establish the true beneficial owners and any possible link with bank officials. All mobile money agents must have business account with the bank for their e-cash transactions whereas personal accounts for e-cash transactions should be discouraged to avoid external people fronting for the mobile money agents.

  • Transaction monitoring

Supervisors and Compliance officers should monitor transactions of mobile money agents to consistently to enable early detection or prevention of mobile money e-cash suppression.

In conclusion, mobile money e-cash suppression is an emerging fraud though some banks may have encountered already, it may not be widespread. It is therefore incumbent on decision makers in these banks to put in place the necessary controls to prevent, mitigate, detect or deter its occurrence.

The writer is an Anti-Fraud and ACCPA Certified AML Compliance professional with years of experience in Retail Banking and Supply Chain management with specialty in documentation and transactional fraud.  I’m an associate member of the Association of Certified Fraud Examiners and an independent researcher with some publications in peer review journals.


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