A national policy or law enforcing mandatory employee background checks would be the best approach to fighting the growing menace of employee-related fraud cases and theft, a business risk consultant Harry Baiden, has said.
Commenting on Bank of Ghana’s latest findings of the increasing incidence of banks employee-related fraud, Mr. Baiden said at least state-owned institutions and companies that provide services to a section of the public like banks, insurance, telecommunication and saving and loans must be made to conduct mandatory background checks on employees.
Statistics from the central bank indicate that the total number of fraud incidents reported to the Bank of Ghana in 2017 increased by 41.66 percent from 1,001 cases recorded in 2016 to 1,418.
In that same year, the total value for reported fraud/attempted fraud amounted to approximately GH¢190.38 million of which GH¢30 million was reported as losses.
The frauds and attempted frauds related to remittance fraud, cyber fraud, cheque cloning, impersonation, forgery, ATMs or card fraud, among others.
According to the central bank, the rising fraud cases is compounded by some rogue employees who are in the habit of perpetuating some of these crimes on their own or act with the assistance of some criminals outside the banking system.
But Mr. Baiden who is Managing Director of GAVAC Business Solutions, a business risk advisory firm stated that the BoG’s findings represent a fraction of incidents being perpetrated by employees across sectors ranging from telecommunications, medical, education and pension.
“It has been reported elsewhere that insurers lose anywhere from 5-30 percent of their annual revenue through employee fraud with larger firms recording between 15-20 percent loss and smaller firms reporting as much as 30 per cent.
“Employers needs to develop and implement robust background verification procedures; most organizations are of the understanding background checks starts and ends with CID checks.
This, however, is one component of the verification process which ranges from, address/residential verification, education, employment, professional references, social media and in some cases a credit reference report. This will give hiring managers a complete picture of the prospective employee and unearth anything a CID report cannot find,” Mr. Baiden stated.