In 2022, financial institutions in the country recorded a significant loss of GHS82 million in a total of 15,164 fraud incidents during the course of the year.
The total comprised of GHS56 million lost to fraud in banks and Special Deposit-taking Institutions (SDIs), and GHS26 million lost in the form of e-money (including mobile money) via payment service providers (PSPs) – including mobile money operators.
This is contained in the Banks, Special Deposit-taking Institutions (SDIs) and Payment Service Providers (PSPs) Fraud Report for 2022, released by the Bank of Ghana (BoG) on Thursday.
The Report seeks to inform the general banking public of fraud trends, indicating the fraud typologies observed in relation to services provided by Banks, SDIs and PSPs. It also indicates measures the central bank is taking to address them and promote the integrity of the banking system.
According to the report, in 2022 there were 2,998 cases of attempted fraud for the banking and SDI sector, as compared to 2,347 cases in 2021, representing a 27.74% increase.
The total money lost in that sector was approximately GH¢56 million as compared to approximately GH¢61million in 2021. This shows a 7.88% decrease from 2021.
So, whereas the number of fraud incidents in the banking and SDI sectors saw an increase, the money lost dropped marginally.
The top five types of fraud which impacted most of the institutions in the sector, according to the report, included forgery and manipulation of documents, fraudulent withdrawals, cheque fraud, cyber/email and cash theft (cash suppression).
Meanwhile, forgery and manipulation of documents emerged as the prominent fraud type, accounting for the highest loss of GH¢33million, which is about 59% of the total.
Per the report, another fraud type which was also on the increase was fraudulent withdrawal, which mainly involved money fraudulently withdrawn from customers’ accounts, resulting in losses totalling GH¢7million.
Staff involvement
The report noted that most of the cases of fraudulent withdrawals had the involvement of staff of banks and SDIs, and the main avenue was cheque fraud (GH¢5million), particularly the use of cloned cheques.
“While staff involvement in fraud persists, the numbers have started trending downwards as a result of strict sanctions imposed by Bank of Ghana and strong advocacy for improved controls by the sector institutions.
“The fraud cases involving staff decreased to 188 in 2022, as compared to 278 in 2021. Most of the incidents recorded involving staff had to do with cash theft (cash suppression) from customers’ accounts and happened to be a very common fraud type in the Rural and Community banking sector,” the report said.
Mobile Money/E-Money
Meanwhile, the PSP sector also experienced some fraud and associated losses due to the increasing usage by consumers of electronic channels for transactions.
The sector, according to the report, recorded a significant number of mobile money fraud incidents and loss values in 2022.
Although fraud incidents reduced marginally in 2022 comparatively, the loss values reported were higher than that of 2021.
PSPs recorded 12,166 mobile money related fraud incidents in 2022 compared to 12,350 incidents in 2021, indicating a 1% decrease.
However, the total value of attempted fraud reported by PSPs for 2022 amounted to GH¢27 million, which is 47% higher than the value of GH¢ 14.2 million recorded in 2021.
But out of those attempts, the actually electronic money lost in 2022 amounted to approximately GH¢26 million, a huge jump of 103% from GH¢12.8million in the previous year.
BoG anti-fraud initiatives and directives
Meanwhile, the BoG has instituted a number of initiatives and issued some directives to the various services providers in an attempt to address fraud in the sector.
▪ The Bank of Ghana said it will intensify sensitization programmes in-person and on
television/radio shows to educate and sensitize the public to improve the public’s understanding of financial matters as well as their rights and responsibilities.
▪ The Bank of Ghana through the Committee for Cooperation between Law Enforcement Agencies and the Banking Committee (COCLAB) will continue to engage the Law Enforcement Agencies to deal with the prosecution of persons involved in fraud.
Directives to Banks and SDIs
▪ Banks are directed to immediately communicate fraud cases in their institutions to the Bank of Ghana and the Ghana Association of Banks to alert all others on the approaches deployed to avoid recurrence.
▪ Banks and SDIs are directed to increase the level of fraud sensitization to their customers.
▪ Banks and SDIs are directed to constantly review the adequacy and operating effectiveness of their risk management (credit risk) and internal control frameworks to detect fraud and other financial crimes within their institutions.
▪ Banks and SDIs are directed to report financial crime including all cash theft (cash suppression) cases to the Ghana Police Service and update the Bank of Ghana until the case is closed.
▪ Banks and SDIs that use mobile applications and internet banking platforms are directed to enable a multi-factor authentication code for their applications to help protect customers.
▪ Banks and SDIs are directed to continuously train their staff to help identify and fight fraud.
▪ Banks and SDIs are directed to ensure the independence of the internal audit functions to provide independent assurance to the Board on the effectiveness of the risk management, internal controls and corporate governance structures of the institutions.
▪ Banks and SDIs are directed to strengthen their ethical codes of conduct by improving the tone at the top and ensuring compliance with the requirements of the ethical values of the institutions.
Directives to PSPs
▪ Education: PSPs have been directed to set targets to achieve annual educational plans on the use and know-how of digital payment products/services offered to the general public and players in the ecosystem (Public Awareness Campaigns).
▪ Surveillance: PSPs have been directed to build capacity to implement an enhanced surveillance process to check the activities of agents who serve customers to reduce fraud on the field or point of sales.
▪ Technology Compliance: PSPs have been directed to implement internal controls, practices and standards to ensure safe technology deployments, i.e. Strict user access management process and password policies, user logs management and fraud management processes.
▪ Strict Punitive Measures against Agent and Subscriber Culprits: PSPs have been directed to share fraud information amongst themselves to ensure fraudulent actors are blocked across all service providers’ platforms, to reduce the risk of fraud re-occurrence.
