Ghana loses Gh¢30.1 million to bank fraud

BY: Jasmine Arku

Fraud cases in the banking industry increased from 1,002 cases in 2016 to 1,418 cases in 2017, the Bank of Ghana (BoG) has disclosed.

The figure represents a 41.66 per cent increase.

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According to the BoG, the total value reported for fraud or attempted fraud amounted to approximately GH¢190.4 million.

Of the total value, GH¢160.30 million, representing 84 per cent, was recovered while GH¢30.1 million, amounting to 16 per cent, are reported as a loss.

This was contained in the BoG’s 2017 State of Banking Sector Fraud Report and made known yesterday at a Financial Crime Sensitisation Programme for stakeholders in the banking industry at Ada.


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Present at the programme were officials from the Economic and Organised Crime Office (EOCO), BoG, National Security, Ghana Police Service, as well as the Ghana Association of Bankers.

Ghana among top 10

The Advisor of the BoG, Mrs Grace Akrofi, in her opening remarks noted that as the use of technology in the banking sector advanced, attempts to defraud the banking system had also increased significantly.

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She said the reported cases of fraud types such as card cloning, phishing, vishing or ransomware attacks were an indication that fraudsters were getting more sophisticated with the advancement of technology.

According to her, a research conducted in November 2016 by the African Union Commission, in partnership with Symantec, an IT firm, found that Ghana was among the top 10 most-attacked countries in Africa.

Mrs Akrofi said the study disclosed that more than 400,000 malware incidents, 44 million spam incidents and 280,000 bots incidents were recorded in Ghana.

She, therefore, called on industry players to be conscious of security lapses instigated by technology.

“The Bank of Ghana, in response to these lapses, has recently instituted a Cyber Security Committee which has been mandated to implement the bank’s cyber and information security directive.

Report

In her presentation, a representative of the BoG, Mrs Barbara Poku, said the report was a collation of fraud reports made by the banks at the end of each month.

She said of the 235 registered financial institutions, made up of non-bank financial institutions (NBFIS), rural and community banks and commercial banks, only 58 reported fraud cases.

She noted that the distribution of reported fraud for 2017 indicated that 51.13 per cent of fraud incidents were reported by the NBFIS, while 33.15 per cent and 15.72 per cent were reported by the commercial banks and rural and community banks, respectively.

Cyber fraud

The report indicated that fraud cases relating to cyber crime had the highest value of attempted fraud, amounting to GH¢110,865,960, with less than one per cent resulting in a loss.

She explained that cyber crime involved unauthorised access to the banking system of financial institutions by external parties, email fraud and crime perpetrated through internet banking and other localised payment and mobile banking platforms.

According to Mrs Poku, the incidence of increased cyber fraud was as a result of a poor cyber security environment, an active presence of fraud syndicates in the banks and telcos, as well as poor controls on the protection of banking data.

Cash suppression

The report further indicated that suppression of deposits and cheques were the highest recorded form of fraud among the NBFIS, with attempted fraud amounting to approximately GH¢15.1 million.

An estimated GH¢11.3 million was, however, lost to this type of fraud.

It said 90 per cent of cases reported by the NBFIS were mainly perpetrated by internal and contract staff, specifically by tellers and mobile cash mobilisation officers.

Other fraud types

Other fraudulent activities included cheque cloning, forgery and alteration of identification, impersonation, cyber fraud, ATM or card fraud, manipulation of accounts and remittance fraud.

A total value of losses or potential losses recorded as a result of fraudulent activities transacted with ATM cards was approximately GH¢1.7 million, while cheque frauds amounted to GH¢3.9 million.