Banking Fraud Cases Reduced to 12%, but Value of Losses Rise – BoG

Dr Ernest Addison

The number of fraud attempts in the banking sector decreased by 12.09% in 2021 to 2,347, a Bank of Ghana report has revealed.

However, the year recorded a loss value of ¢61 million, compared to a loss of ¢25 million in 2020. This represents a 144% year-on-year increase.

According to the Banking, Specialized Deposit Taking Institutions and Electronic Money Issuers (EMI) Fraud report, the top types of fraud that account for this figure include automated teller machine (ATM) and point-of-sale (POS) fraud, theft identity, lending and credit fraud, document forgery and manipulation, cash suppression and e-money fraud.

However, there were other types of fraud, which also recorded huge losses. The most notable are identity theft, loan and credit fraud, cash removal, e-money, and document forgery and manipulation.

The report adds that the increase in the use of electronic and digital platforms in the financial sector has led to an increase in ATM and point-of-sale card fraud.

ATM/POS card fraud recorded the highest loss of ¢22 million. This can be attributed to the negligence of some customers and the weak systems of some financial institutions.

Another major type of fraud was identity theft, which recorded a loss of ¢10 million. This loss can be attributed to the lack of due diligence on the part of bank staff and financial institution customers when carrying out transactions.

The EMI sector reported a significant number of mobile money fraud (MOMO) incidents and loss values ​​in 2021.

IMEs recorded 12,350 fraud incidents related to MOMO in 2021. The total value of fraud reported by EMIs for 2021 was ¢14.2 million.

The total e-money loss incurred by EMIs in 2021 was approximately ¢12.8 million.

BoG initiative to fight against fraud

The Bank of Ghana said it was strengthening its fraud monitoring activities and enforcement of required internal controls and risk governance within banks, SDIs, EMIs and other regulated entities.

The Bank of Ghana has also issued a notice to the public, banks and other regulated entities on the use of the Ghana Card as the primary identification document for all financial transactions. All Banks and SDIs are therefore required to pay particular attention to this directive and to ensure compliance with it. This Central Bank mitigates the incidence of fraud in the financial sector.

Again, a secretariat has been set up in the Financial Stability Department of the Bank of Ghana to coordinate the activities of the Cooperation Committee between Law Enforcement and the Banking Community (COCLAB). This is to ensure that COCLAB achieves its mandate to develop and implement effective controls to mitigate fraud in the industry.

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