The latest annual Fraud Report from the Bank of Ghana indicates that in 2023, regulated financial institutions in the country recorded 15,865 fraud cases and lost GHS88 million in those case.
This compares to 15,164 case in 2022, reflecting a 5% rise, and a financial loss of GHS82 million, indicating an increase of 7%.
The Report seeks to create awareness of fraud occurrences and trends identified within the reporting year with the view to promote the soundness and integrity of the banking system.
The regulated institution covered in the exercises were Banks, Specialized Deposit-Taking Institutions (SDIs) and Payment Service Providers (PSPs).
Out of the total amount lost, the report said banks and SDIs combined, lost up to GHS167 million to fraud, but GHS95 million of that was recovered through the collaborative efforts of stakeholders and the fraud controls measures, reducing the actual loss to GH¢72 million, while PSPs accounted for the remaining GHS16 million.
SIM Swap Fraud
Analysis of the 2023 data showed that fraud heightened in fraudulent withdrawals from victims’ accounts, cyber/email fraud, and cash theft (cash suppression), whereas another area of concern was SIM swap related fraud, where SIM numbers linked to bank accounts were fraudulently taken over and monies subsequently withdrawn from the accounts.
This form of fraud targets individuals who have banking applications on their mobile phones and have linked their bank accounts to mobile money wallets,” the report said.
Per the report, SIM swap related fraud accounted for some GHS4.633 million in 2023 alone, having recorded zero for the three years prior.
Indeed, last year, Techfocus24 reported at least three cases of SIM Swap fraud in which three customers of Ecobank and MTN in particular lost GHS250,000 in one case, GHS4,000 plus US$8,000 in another case and GHS32,000 in another.
The Economic and Organized Crime Office (EOCO) put out some names and pictures of SIM swap fraudsters and some five suspects were also arrested and put before court last year.
Attempted fraud
According to the report, while attempted fraud cases in the banking and SDI sectors declined sharply by 59% in 2023 compared to 2022, the total loss value associated with these cases stood at approximately GH¢72 million, a 29% increase over the 2022 figure of
GH¢56 million recorded.
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.
PSP Sector losses
The PSP sector also recorded a loss of GH¢16 million involving 14,655 cases in 2023.
Although the loss value recorded in 2023 represented a 38% decline compared to the GH¢26 million recorded in the previous year, the incidents showed a 20% increase compared to the 12,166 cases in 2022.
The figure below shows the distribution of banks, SDIs, and PSPs fraud loss values for 2023 and 2022.
Banks and SDIs recorded higher loss values whereas the PSPs recorded a decline in the loss value for the year under review, even though the PSP case count increased.
Staff complicit
The report said new fraud types are emerging and unfortunately some staff of banks/SDIs in particular, who are supposed to safeguard the financial systems are being compromised.
Per the report, the number of staff involved in fraudulent activities in Banks and SDIs rose from 188 in 2022 to 274 in 2023, representing an increase of 46%.
Out of the 274 cases of fraud recorded involving staff in 2023, 211 (77%) were involved in cash theft (cash suppression), as compared to 140 (66%) staff involved in 2022.
The BOG expressed concern about this statistic and urged the Banks and SDIs to strengthen their internal controls and enhance staff due diligence during recruitment, as well as reinforcing continuous in-house staff training on professional conduct.
Recently, in Nigeria, some 49 staff of various financial institutions have been sacked for being involved in various kinds of fraud that led to the loss of N42.6 billion (US$26 million).
But in Ghana, the Report did not say how many workers were involved and what has happened to them, even though it acknowledged some staff were complicit in the fraud cases.
BoG Recommendations
The reports said BOG continues to engage institutions with high incidences of fraud to develop action plans to address such incidences in the industry, adding that the central bank has also strengthened its engagement with relevant stakeholders to enhance collaboration in the fight against cyber related fraud.
The regulator has also issued directives to banks, SDIs and PSPs which, if implemented, will help reduce the incidence of fraud in the sector.
The directives include the following:
The PSPs should comply with the provisions of section 34 (3) (a) and (b) of the Payment Systems and Services Act 2019 (Act 987) which requires PSPs or EMIs (mobile money operators) to deactivate the electronic money account of a customer for two days when that customer swaps or replaces a SIM card and re-activates the electronic money account after the customer presents a valid identification to mitigate the occurrences of SIM swap related fraud.
PSPs should implement robust financial fraud programs and processes 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.
PSPs must continue to share fraud related information with the Bank of Ghana and other relevant institutions in a timely manner.
PSPs must screen their agents thoroughly before establishing relationships with them.
The PSPs must deploy Ghana Card verification systems to all their agents to minimise SIM swap impersonation.