Fraudulent withdrawals increase by 1,006% in 2020 – BoG report
Fraudulent withdrawals per the 2020 Banking Industry Fraud report by the Bank of Ghana (BoG) increased by some 1,006 percentage points in 2020.
According to the BoG, fraudulent withdrawals increased from 16 cases in 2019 to 177 cases in 2020 representing an increment of 1,006.3 percent thereby recording the highest rate of increase over E-Money and ATM/POS fraud in the year under review.
Sixty-four (64) cases of E-Money fraud the BoG notes, were recorded in 2020, as compared to 14 cases recorded in 2019, representing an increase of 357.1 percent in year-on-year terms.
For ATM/POS fraud, some 168 cases were recorded in 2020, as compared to 110 cases recorded in 2019, representing a 52.7% increase in year-on-year terms.
The report by the BoG further reveals that banks’ staff involvement in the reported fraud incidents for 2020 increased by 6 percentage points from 51 percent in 2019 to 56 percent in 2020.
The BoG attributed the rise in staff involvement in fraud incidents to the absence of corporate governance structures in some sections of the banking sector, resulting in the lack of accountability and transparency in their activities.
Reported fraud incidents, the BoG notes increased to a total case count of 2,670 cases in 2020 from the 2,311 cases recorded in 2019 resulting in a surge in the value of fraud reported cases from Ghs 115 million to Ghs 1 billion.
On the back of increased cases of fraud incidents and in keeping with its mandate of ensuring the efficient operation of the financial system and also, undertaking surveillance of the financial system to identify risks for prompt remedial action, the Bank of Ghana has made the following recommendations to banks and SDIs;
- Contract/temporary staff of financial institutions should be adequately vetted by the Police and Bank of Ghana to help identify staff with questionable characters.
- The banking industry should take a critical look at remuneration of temporary staff and, in collaboration with the recruitment industry, set equitable minimum standards of payment for temporary staff assigned to the banking sector.
- · The KYC/CDD and transaction monitoring systems of financial institutions have to be strengthened in order to facilitate the detection of suspicious or abnormal activities on customers’ accounts.
- · E-Money issuers must enhance and sanitize their existing KYC database by acquiring authentic and verifiable bio data on all existing mobile account holders.
- · Banks should provide regular and adequate consumer education on cyber security for their customers, in order to equip account holders to protect themselves from cyber fraud.
- · Banks must also ensure that they activate a second level authentication in online transactions, by requesting for specific One Time Passwords (OTPs) and PINs.
- · Consumers should be educated on the safe usage of digital/electronic products and services. They should also be encouraged to use efficient electronic payment methods that keep an audit trail of fund movements.
