The reported value of fraud recorded by Banks and Specialized Deposit-Taking Institutions in Ghana in 2020 was about GH¢1 billion.

This represents an increase of over 750 percent when compared to the reported value of fraud recorded in 2019, which stood at about GH¢115 million.

That’s according to the Bank of Ghana’s Banks & SDI Fraud Report for the year 2020.

The emergence of the COVID-19 pandemic, according to the fraud report, saw customers who were not used to digital/electronic methods for making financial transactions being compelled to use them.

Consequently, some sections of the banking sector were exposed to heightened levels of fraud-related risk, due to the increased patronage of electronic/digital products and services.

Number of fraud cases

In total, the year 2020 recorded a marginal increase in reported fraud incidents with a minimal decrease in losses.

A total case of 2,670 cases were recorded in the year 2020, as compared to 2,311 cases in 2019, representing a year-on-year increase of about 15 percent.

Despite the reported value of fraud rising to GH¢1 billion, actual losses incurred as a result of fraud for 2020 stands at GH¢25.40 million, as compared to an estimated loss of GH¢33.44 million in 2019, representing a 24% decrease.

In terms of the number of cases reported, fraudulent withdrawals recorded the highest rate of increase in the year under review.

Fraudulent withdrawals increased from 16 cases in 2019 to 177 cases in 2020 representing an increment of 1,006.3%.

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.

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.

ATM/POS fraud tops list for actual losses

Fraud types that saw significant increases in success rate in 2020 were ATM/POS fraud, impersonation and remittance fraud.

ATM/POS related fraud accounted for 32.2% of total fraud-related loss incurred in 2020 and recorded the highest loss value of GH¢8.19 million in 2020, as compared to GH¢1.26 million recorded in 2019, representing a 548.1% increase in year-on-year terms.

E-money fraud also recorded a significant increase in loss value.

Loss incurred through E-money fraud increased from approximately GH¢ 0.37 million in 2019 to an estimated GH¢ 1.04 million in 2020, representing a 180.0% percentage increase.

This upsurge may also be a result of an increase in the use of E-Money services due to the COVID–19 pandemic.

Burglary also recorded a considerable increase in reported and loss values for 2020 as compared to 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.

Staff involvement

Staff involvement in the commission of fraud also experienced a significant increase, especially suppression of cash.

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

Recommendations

The Bank of Ghana went on to make a number of recommendations to help mitigate the incidence of fraud in the country.

These include the adequate vetting of contract/temporary staff of financial institutions by the police and Bank of Ghana to help identify staff with questionable characters.

The banking industry should also take a critical look at the remuneration of temporary staff, according to the report.

In addition to adequate consumer education on cybersecurity for their customers, banks have been asked to strengthen their Know Your Customer & Customer Due Diligence as well as transaction monitoring systems in order to facilitate the detection of suspicious or abnormal activities on customers’ accounts.