Financial sector records 700 fraud cases last year – BoG
More than 700 fraud cases were recorded in the financial sector in 2023, depriving the sector of substantial amount of revenue, the Bank of Ghana (BoG) fraud report has revealed.
The report titled Annual Fraud Report by the BoG which seeks to create awareness of fraud occurrences and trends identified within 2023 with the view to promote the soundness and integrity of the banking system, covered Banks, Specialised Deposit-Taking Institutions (SDIs) and Payment Service Providers (PSPs).
The fraud typologies covered by the BoG report are ATM Card fraud, burglary, cheque fraud, cyber-email fraud, e-money fraud, fraudulent withdrawals, forgery and manipulation of documents, lending/credit fraud, remittance fraud, and cash theft (suppression of cash and deposits).
It said overall, the count of fraud cases recorded in the three sub-sectors increased to 15,865 in 2023 from 15,164 in 2022, reflecting a 5 per cent rise.
“These cases corresponded to total loss value of approximately GH¢88 million in 2023 as compared to GH¢82 million in 2022, indicating an increase of about 7 per cent,” the report stated.
The BoG noted that analysis of the 2023 data showed that fraud heightened in fraudulent withdrawals from victims’ accounts, cyber/email fraud, and cash theft (cash suppression) and SIM swap related fraud was another issued flagged by the report.
“While attempted fraud cases in the banking and SDI sectors declined sharply by 59 per cent in 2023 compared to 2022, the total loss value associated with these cases stood at approximately GH¢72 million, a 29 per cent increase over the 2022 figure of GH¢56 million recorded,” the BoG report noted.
Additionally, it indicated that the sharp increase in the loss value was influenced by outlier fraud cases involving foreign currencies, which when converted to Cedi, ballooned the 2023 attempted fraud value at loss.
In the banking sector, the report said in 2023 banks reported a total count of 969 fraud cases which shows a 17 per cent drop from the count of 1,163 cases in 2022.
The total loss value to banks with respect to fraud cases recorded in 2023 was approximately GH¢63 million compared to GH¢52 million in 2022, showing an increase of 21 per cent.
“The top five fraud types recorded in 2023 in the banking sector in terms of loss value were: cash theft (cash suppression), cyber/email fraud, and fraudulent withdrawals from accounts. Cash Theft (Cash Suppression) recorded the highest fraud loss in 2023 with a value of GH¢14.8 million, a steep rise of 14 times over the GH¢1 million recorded in 2022,” the BoG said.
In the SDI sector, the report pointed out that 241 fraud cases were recorded in 2023 as compared to 1,835 cases in 2022, and the major fraud cases recorded in the SDI sector were cash theft, fraudulent withdrawals, and forgery and manipulation of documents.
The BoG report explained that the PSP sector recorded a loss of GH¢16 million involving 14,655 cases in 2023, indicating that although the loss value recorded in 2023 represented a 38 per cent decline compared to the GH¢26 million recorded in the previous year, the incidents showed a 20 per cent increase compared to the 12,166 cases in 2022.
On measures to address fraud in the banking sector, the BoG stated that it had directed banks and SDIs to update their technologies and tools with enhanced built-in security features to curb fraud, adding that banks and SDIs were equally mandated to prioritise employee training and continued due diligence and strengthening of internal controls.
For the PSPs, the BoG said it had directed them to implement robust financial fraud programmes and processes in order to curb SIM swap related fraud.
“PSPs should provide all points of sale and outlets with adequate information on fraud risk management to enable them to identify and deal with fraud, and must continue to share fraud related information with the BoG and other relevant institutions in a timely manner,” the BoG said.
STORIES: KINGSLEY ASARE