Cheque frauds on the rise, even as banks turn to digitize systems

With the entire banking system moving away from the traditional way of banking to digital or electronic alternatives, expectations are that the issue of cloned cheques and other cheque related frauds will be on a downward spiral; not so however!

Data from the e-Crime Bureau on financial crime incidents, in 2017, show these trends not to be going anywhere soon, as incidents of cloned cheques keep emerging.

In an interview with Goldstreet Business, a Security Intelligence Analyst of e-Crime Bureau, Mr Eric Kwaku Mensah noted that, in 2017, there was an upsurge in the number of cheque fraud incidents in the financial sector. The Security Intelligence Unit of e-Crime Bureau received 71 reported cases which is an increase from the 58 reported cases in 2016.

Nonetheless, he mentioned that the number of cases reported to e-Crime Bureau and even to the regulator (Bank of Ghana) were far less than what is actually happening at the various institutions.

The three main forms of cheque fraud reported include; first, low grade counterfeit/cloned cheques, where a target institution’s cheque design is printed on a non-bank paper to perpetrate fraud. The criminals print the target customer’s account details on these counterfeits and forge customer’s signature(s) for the fraudulent withdrawals.

The second trend noticed is forgery of signatures on genuine cheque leaflets for fraudulent withdrawals. These fraudsters are in some cases able to obtain genuine cheque leaflets of target bank customers and forge their signatures for withdrawals from their accounts.

The third, which involves cheque alteration, is where a genuine cheque issued to the bank customer has been altered by a fraudster for withdrawals.

Mensah mentioned that, there is a resurfacing of an old trend, which became very prevalent last year, where criminals used security paper for the cloning of the cheques.

He noted that, some of these criminals in using existing cheques leaflets, are able to clean the [already existing] personalization information on it [using some chemicals], then print their designed information on the altered leaflets.

Staffs of banks are, on some occasions, unable to detect the alterations on the cheque leaflets, hence, ending up honouring them.

As a matter of banking practice, banks are required to undertake strict telephone confirmations of the customers involved in any cheque transaction especially in the case of third-parties. However, there is also a parallel trend of cheque fraud with SIM card swap, which aids the fraud syndicate.

In such cases, the targeted owner of a particular SIM number is blocked from access to any service with the SIM, hence giving full access to the fraudsters to receive any call that comes in from the banks for the authorization of any cheque payment.

Also, there have been incidents of stolen cheques for fraudulent withdrawals.

Mensah indicated that with the emergence and availability of sophisticated printing technologies and devices, fraudsters are able to print high-grade counterfeits that could outwit the detection mechanisms of some counting machines.