CHARMAINE PRETORIUS, Durban | Thursday
BANKS in South Africa last year dismissed 926 of their employee contingent of 120 000 due to fraud, Absa Bank said on Thursday.
Enterprise wide risk management general manager Maadian Botha of Absa’s forensic services department, was addressing a group of Durban business people on Thursday on fraud risk management and the extent of fraud in the banking sector.
Botha said the 47 banks operating the country last year dismissed 926 bank employees found guilty of fraud. This represented almost one percent of employees.
Botha said police annually registered about 65 000 dockets for fraud which amounted to about R8_billion.
In April last year the police directorate of special operations was investigating 43 cases with a combined monetary value of R5,3_-billion.
Moreover it is estimated that only about 50% of all fraud is reported. Botha said banks on average daily dealt with about 1,1-million cheques valued at R21-billion.
About 550 000 ATM transaction valued at R98 million are done daily.
The Banking Council of SA earlier this year said it was estimated that more than 60% of the actual losses from cheque fraud, which last year amounted to R162-million, could be attributed to altered cheques.
This had led to the decision that from August 1 banks would no longer accept altered or previously deposited cheques or cheques that were previously negotiated.
According to statistics provided by only five of the banks in South Africa — two large and three smaller banks — they had lost R376-million due to cheque, credit card and ATM fraud in over the last three years.
Botha said cheque fraud accounted for about 35% of these losses.
At the same time these banks also managed to avert losses of R740-million through rejecting suspicious cheques.
In 1998 these five banks lost R55 million in 1082 incidents of cheque fraud. Only R11-million was recovered, but potential losses of R366-million were averted.
In the same year credit card losses of R45-million and ATM losses of R50-million were reported. The following year 959 incidents of cheque fraud amounted to losses of R48-million.
Only R2-million was recovered and these banks managed to prevent losses of R374 million.
Losses due to credit card fraud increased to R60,8-million and ATM losses decreased to R45-million, but increased again in 2000 when ATM losses reached R73 million.
”Many may think that this is a banking problem, but it is not. It is an economic problem and we are all part of it. The fight against economic crime is a joint one, it affects all of us,” Botha said.
According to Deloitte and Touche Forensic Services associate director Ian Barnett commercial crime in 1999 alone accounted for losses of R7-billion.
Speaking on increasing occurrence of fraud and ways to manage risk, Barnett said most fraud was detected by accident or tip-offs.
In a bid to decrease incidents of fraud companies had to ask themselves if they have a coherent anti-fraud strategy.
”Who are they employing and who are they doing business with.
Understanding risk is paramount to dealing with it,” he said.
According to Jaco Pieterse of Deloitte & Touche it is estimated that between 50% and 75% of all fraud in a company was perpetrated with the assistance of employees, who may or may not have had outside help.
”They know in many cases that the chances of getting caught are slim.”
He said companies often created haystacks of data which made it easy to ”hide big needles” such as ghost employees who even got paid bonuses. – Sapa