Depositors worried over GH¢115m staff-aided bank fraud

  • GH¢5m in cyber fraud
  • GH¢8m in fraudulent withdrawals and forgery of documents
  • GH¢9m in ATM/POS fraud

The number of fraud cases which occurred in banks in 2019 have increased over what was recorded a year ago, with some of the cases largely perpetrated by staff, thereby, worsening fears of depositors as to whether their monies are safe with the banks, with questions also arising from the use of electronic platforms.

The Banking Industry Fraud Report published by the Bank of Ghana shows that the industry’s reported fraud in 2019 increased by more than 5.5 percent, recording 2,295 cases and valued at GH¢115 million. Approximately GH¢33.4 million representing 28.9 percent this amount was reported as losses and 71 percent, i.e., GH¢82 million was unsuccessful or unrecovered.

Of the types of frauds, cases relating to cyber-crime involved email fraud, crime perpetrated through internet banking and other localised payment and mobile banking platforms during the year under review decreased by 34.4 percent 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¢50.5 million, with actual loss of GH¢14.3 million.

Suppression of cash and deposits, another type of fraud, cases increased by 43.1 percent from 1,239 cases in 2018 to 1,774 cases 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. This type of fraud accounted for the largest portion of the reported cases, with 94 percent of those cases being perpetrated by staff of the banks. Staff who suppressed cash or deposits were usually ‘frontline staff’, particularly tellers, mobile bankers or sales agents.

This, the Bank of Ghana describes as alarming and calls for reforms in the internal structure of banks to address it. “The alarming rate of involvement of bank staff in the perpetration of fraud in the banking sector, calls for significant reforms in the engagement, remuneration and disengagement processes of employees and contractual staff of financial institutions,” the report stated.

The high incidence of the staff orchestrated crimes, CEO of startup company, Agile Courier and Logistics, Agnes Sarfoa, who is also a customer of a bank, said creates a sense of insecurity for her knowing the very people entrusted with her money are the ones stealing it.

“I feel insecure thinking my money is safe with a bank but knowing later that the same people who are supposed to protect the money are the ones stealing it or aiding outsiders to defraud me,” she said in an interview with the B&FT.

To dismiss such thoughts and fears from customers, she added: “banks must punish such staff by sacking them and reporting to the police so that it will serve as deterrent to any other staff contemplating similar action. If they do this and let the customers know of what actions they have taken, customers will begin to feel safe with their deposits in the banks.”

Another bank customer, Sylvia Konadu Owusu, says the report has just confirmed and worsened her fears about the safety of banks’ electronic platforms.

“Per what the report is saying, they are confirming my fears about the use of these electronic platforms of the banks. If the report had been otherwise, i.e., the incidence of fraud has rather reduced, then I would have developed some confidence in using these electronic platforms.

So for me, I still will not subscribe to using these online platforms until there are massive improvements about their security systems. There should also be education about the use of these systems so that those who are using it will know what safety measures to take when transacting business on such platforms,” she said in an interview with the B&FT.

Further breakdown of the report shows rural and community banks reported 55 percent of the total cases, and commercial banks and savings and loans institutions reported 23 percent and 22 percent of the cases respectively. In total, 83 institutions reported cases in 2019, as compared to 72 in 2018.

When it comes to cheque fraud, the number of cases increased marginally by 2.5 percent 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, the report says, 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.

Then, fraud cases reported by financial institutions regarding manipulation of accounts and negotiable instruments resulted in attempted fraud values of approximately GH¢38.8 million, of which GH¢33.06 million was recovered and GH¢5.7 million was lost. With this particular type of fraud too, according to the report, over 80 percent of perpetrators for all cases reported were done by staff of the financial institutions. Staff in question mostly manipulated the internal accounts and dormant salary accounts of customers.

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