GHc25.4m stolen from financial institutions in 2020

• Posted on August 27, 2021August 27, 2021
• by Nana Kwesi Coomson
• Comment

-56% of reported fraud cases involved staff – BoG 

The total value of reported fraud cases by financial institutions for 2020 amounted to approximately GH?1.09 billion.

773.6% increase in reported fraud cases
This represents an increase of 773.6% in value of reported cases, compared to a reported value of GH?115.51 million recorded in 2019.

GH?25.4m stolen
The criminals succeeded in stealing GH?25.4 million (GH?25,409,600), compared to the   GH?33.4 million (GH?33,449,000) stolen in 2019.

Types of fraud 
The types of fraud cases include suppression of accounts, fraudulent withdrawals, ATM/POS, forgery and manipulation of documentation, e-money fraud, cyber/e-mail fraud, mending/credit fraud, cheque fraud, remittances fraud, burglary, impersonation, and others.

26.4% decrease in successful fraud 
The year 2020 recorded a 26.4% decrease in the success rate of fraud attempted.

2,608 Incidents of fraud reported 
A total of 2,608 incidents of fraud were recorded in 2020 as compared to 2,311 fraud cases reported in 2019, representing a year-on-year increase of 12.9%.

2020 banking industry fraud report
The 2020 banking industry fraud report, published by the Bank of Ghana (BoG), indicates that even though attempted fraud values increased significantly, loss incurred through fraud reduced by 24%.

The significant increment in reported values is as a result of increased values in attempted correspondent banking fraud.  

56% reported fraud cases involved staff  
What is even worrying is that the staff involvement in the commission of fraud also experienced a significant increase, especially suppression of cash.

According to the BoG, 56% of reported fraud cases and 93% of reported cash suppression cases involved staff of the reporting institutions.

Data recorded over the years shows a persistent trend of staff involvement in fraud.
 
The BoG said despite numerous notices of caution sounded out to the banking industry, in almost every fraud report issued since 2017, the phenomenon of staff involvement continues to increase.

The steady rise in this phenomenon, generally, could be attributed to the use of poorly remunerated temporary staff, who undergo limited background checks, for sensitive tasks and a lack of corporate governance systems that help to ensure accountability, fairness and transparency.  

Fraudulent withdrawals – GH?884,700 
Fraudulent withdrawals increased from 16 cases in 2019 to 177 cases in 2020, representing an increment of 1,006.3%

E-money fraud – GH¢1.04m lost
E-money fraud also recorded 64 cases in 2020, as compared to 14 cases recorded in 2019, representing an increase of 357.1% in year-on-year terms.
E-money fraud recorded a loss value of GH¢1.04 million for 2020, as compared to a loss value of GH¢0.37 million for the same period in 2019, representing a 180.0% percentage increase.
E-money fraud also recorded a significant increase in loss value. 
Even though savings and loans companies recorded negligible e-money-related losses, the sector recorded a 100.0% success rate of e-money-related fraud.
 This may be an indication of the absence of security systems in the sector to forestall e-money-related losses.
Microfinance companies follow closely with 83.09% success rate in e-money-related fraud. 
This is followed by rural and community banks with success rates of 75.9% and 44.8% respectively. 
The data indicates that sectors with less stringent security measures record higher success rate of e-money-related fraud.  
Most reported losses in 2020 were related to cases of customers who were misled to transfer funds from their wallets to designated mobile money wallets whose holders are unfamiliar or unknown to the victims.
Banks recorded the highest loss values for e-money fraud. Banks lost GH¢604,755.65, representing 57.7% of total e-money-related fraud recorded in 2020. 
Rural and community banks followed with a loss of GH¢398,883.59, representing 38.1% of total e-money-related losses reported in 2020.


ATM/POS fraud -GH?8.20m stolen 
ATM/POS fraud recorded 168 cases in 2020, as compared to 110 cases recorded in 2019, representing a 52.7% increase in year-on-year terms
In 2020, ATM/Card fraud accounted for 6.3% of the total number of reported cases as compared to a proportion of 4.7% recorded in 2019. 
ATM/Card fraud recorded a loss value of approximately GH¢ 8.19 million, representing 32.3% of fraud related loss incurred in 2020, as compared to an approximate loss value of GH¢1.26 million recorded in 2019, representing 3.8% of total fraud related loss incurred in 2019. 
 Losses incurred through ATM/Card fraud recorded a 548.1% increase in year-on-year terms
ATM/POS fraud recorded the highest success rate of 97.3% in 2020, in comparison with a recorded success rate of 11.5% in 2019. 
ATM/POS fraud recorded the highest reported loss value of approximately GH?8.20 million in 2020, as compared to an approximate loss value of GH?1.26 million in 2019.

Suppression of deposits – GH?2.3m lost  
 Suppression of deposits in 2020 resulted in the loss of GH?2.3 million (2,394,000).
Loss through cash suppression may be as a result of weak internal controls, or non-adherence of institutions in the sector, to their own security systems.
Out of a total of 2,670 fraud cases reported in 2020, 1,958, representing 73.3% of total submissions, were related to cash suppression.  
In 2019, suppression of deposits constituted 76.8% of all fraud incidents reported. 
Notwithstanding this increase, the success rate of suppression fraud decreased considerably from 80.7% in 2019 to 58.5% in 2020. 
The microfinance sector and rural and community banking sector recorded the highest success rates of 68.9% and 68.2% respectively, in cash suppression fraud. 
Rural community banks lost GH¢1.6 million (GH¢1,687,193.77) through cash suppression, as against a total of GH¢538,595.32 by banks.
This is followed by the savings and loans sector with 53.3%; the finance house sector with 44.7%; and the banks with 40.9%. 
Suppression recorded the highest rate of staff involvement. 
A total of 78.6% of all cash suppression cases reported in 2020 indicated the involvement of staff.
 
Burglary – GH¢1.35m stolen 
Burglary also recorded a considerable increase in reported and loss values for 2020 as compared to the reported and loss values recorded in 2019. 
Burglary recorded a reported value of approximately GH¢1.35 million in 2020, as compared to an approximate reported value of GH¢0.70 million in 2019, representing an increase of 97.7% in year-on-year terms.    
Loss incurred through burglary in 2020 accounted for 5.3% of total fraud-related losses recorded in 2020, overtaking prevalent fraud types such as e-money and cheque fraud in the process.

Impersonation fraud – GH¢0.05 million
Impersonation accounted for 0.1% of the total number of reported cases in 2020 and accounted for 0.2% of all fraud-related losses incurred in 2020.
Impersonation recorded a loss value of GH¢0.05 million in 2020, as compared to a loss value of GH¢0.96 million recorded in 2019, representing a 38.0% decrease in year-on-year terms
Impersonation fraud recorded a success rate of 94.7%, as compared to a success rate of 13.16% recorded in 2019.

Remittance fraud – GH¢521, 000
Remittance fraud incidents recorded in 2020 accounted for 0.37% of fraud cases reported in 2020 as compared to a rate of 0.35% recorded in 2019. 
Remittance fraud accounted for 0.2% of total loss incurred through fraud in 2020.
Remittance fraud also recorded a marked increase in the rate of success in 2020. Also, 2020 recorded a 64.3% rate of success, as compared to a success rate of 32.4% recorded in 2019. 
Remittance fraud incidents recorded in 2020 accounted for 0.37% of reported fraud cases as compared to a rate of 0.35% recorded in 2019. 
Remittance fraud accounted for 0.2% of total loss incurred through fraud in 2020.


Forgery of documents – GH?6.5m 
Forgery and manipulation of documents led to the loss of GH?6.5m (GH?6,508,700).
Forgery of documents also recorded a considerable increase in success rate for the period under review.  2020 recorded a success rate of 76.1%, as compared to a success rate of 11.8% recorded in 2019.    
One method identified by the banking industry is that suspects pick up balance requisition slips from dustbins in the banking hall and use the information and signature to fraudulently access funds from the customers’ accounts.

Cheque fraud – GH¢0.47m 
Cheque fraud recorded the most significant reduction in its success rate in 2020.  
The success rate of cheque fraud declined from 77.7% in 2019 to 7.7% in 2020.
In 2020, cheque fraud accounted for 0.60 % of the total number of reported cases, as compared to 1.7% of total fraud reported in 2019.
Cheque fraud recorded a loss value of approximately GH¢0.47 million in 2020, representing  1.8% of total fraud-related loss incurred in 2020, as compared to a loss value of GH¢2.39 million recorded in 2019, representing  7.2% of the total fraud-related loss incurred in 2019.
 Cheque fraud recorded a percentage decrease of 80.5% in year-on-year terms.
Cheque fraud refers to the unlawful use of cheques for the purpose of acquiring funds illegally. 
There are four main types of cheque fraud.  They are cheque cloning, counterfeit cheques, stolen cheques, and alteration of cheques. 
 
Cyber/E-mail fraud – GH¢1.05m lost
In 2020, cyber/E-mail fraud accounted for 1.05% of the total number of fraud cases recorded. 
Cyber/E-mail fraud recorded a loss value of approximately GH¢1.05 million in 2020 as compared to a loss value of GH¢14.3 million recorded in 2019, representing a 92.6 % decrease in year-on-year terms.  
This remarkable decline may be as a result of the industry’s adherence to Bank of Ghana’s Cyber Security Directive issued in 2018.
In 2020, cyber-related crime mainly involved e-mail fraud and fraud on internet payment platforms. Cases of e-mail fraud involved the forwarding of outward transfer instructions from the officially recognised e-mail addresses of some customers to their bankers.
 
Manipulation of Accounts and Negotiable Instruments – GH¢6.5m lost 
This type of fraud refers to the alteration of negotiable instruments such as payment slips and payment orders, and the diversion of fixed deposit proceeds into private investments. 
These were mainly perpetrated by rural bank officials. 
 In some cases, staff fraudulently used their profile to divert money from dormant accounts into fictitious accounts.
In 2020, forgery and manipulation of accounts and negotiable instruments accounted for 5.7% of the total number of reported cases, as compared to a rate of 6.8% in 2019. 
Forgery and manipulation of accounts and negotiable instruments recorded a loss value of approximately GH¢6.5 million in 2020 as compared to an approximate loss value of GH¢4.4 million recorded in 2019, representing a 47.6% increase in year-on-year terms. 
Forgery and manipulation of accounts and negotiable instruments accounted for 25.6% of fraud-related losses incurred in 2020.

 Fraud categorised as ‘others’ – GH¢2.76m lost
In 2020, fraud categorised as ‘others’ accounted for 0.3% of the total number of reported cases and accounted for 10.9% of fraud-related losses incurred in 2020. 
Fraud categorised as ‘others’ recorded a loss value of approximately GH¢2.76 million in 2020, as compared to a loss value of GH¢3.26 million recorded in 2019, representing a 15.4% decrease in year-on-year terms.

-By Elvis DARKO, Accra