Why you should monitor bank account regularly


Is your bank account dormant or used to make huge and regular payments? Beware fraudsters and bank staff are on the prowl for such accounts, writes Michael Oriedo.

If you have noticed a withdrawal on your bank account, which you did not make and your bank cannot explain, chances are you are a victim of fraud.

CCI has ascertained that some dishonest bank employees are defrauding account holders their hard-earned cash using tactics they have devised to beat banks’ systems. Unfortunately, bank workers have realised it is quite easy to get away with the crime due to weak laws and lenient sentences on ‘white collar’ crime in Kenya.

The incidents involve fraudulent cashing of cheques, transfer of funds from one account to another and card frauds that include automated teller machine withdrawals. The employees work with their accomplices outside banks to commit the felonies.

John Kaluki, a teacher at a primary school in Kangundo was surprised when he requested a statement from his bank recently.

No Help

It showed he had made an ATM withdrawal of Sh20,000 at his branch in Kangundo. Certain that he had not made the transaction, Kaluki sought help from the bank’s manager who assured him the matter would be investigated.

Hopeful that he would recover his money, Kaluki got another shock. He went to deposit money in his account but before he did, he requested for a statement.

The elderly man discovered that Sh23,000 had been withdrawn from his account that very morning. Furious, Kaluki went back to the bank manager. He advised him to seek help from the bank’s headquarters in Nairobi.

The teacher lodged a formal complaint at the bank’s head office but since then, the mystery has not been resolved.

"I have travelled from Kangundo to Nairobi without making any progress. Every time I am told the bank is still investigating," he laments.

Kaluki, who lives alone because his wife works in another county and his children are in boarding school, says he does not use his ATM card.

Faulty Cameras

"I do not know how long this will take to resolve. But I just want is to get my money," says Kaluki who froze the account.

Unfortunately for him, during the period the money disappeared, the bank’s CCTV cameras were faulty.

In another incident, Catherine Muchemi, a businessperson in Nairobi, was expecting some money from Britain but it did not reflect in her bank account more than a week after the money had been wired.

"I had supplied a client with some goods from Kenya. She assured me she had credited my account upon receiving them but when I checked, the money was not there," she recounts.

Muchemi requested her customer to email her the transaction slip. She then presented it to the bank. Upon receiving the slip, a bank clerk asked her to give the institution some days to trace the money.

"Someone from the bank called after two days and informed me to check my account. When I did, the money was there but he declined to tell me where and why it had disappeared. I tried to follow up but I lost interest because of the bureaucracy involved," she says.

A recent confidential report by the Anti-Banking Fraud Unit reveals that cases of banking fraud are on the rise. In the period January to June this year, commercial banks lost an astounding Sh761 million.

Interestingly, the report singles out bank employees as the main perpetrators of the crimes. It says the employees either execute the crimes themselves or collude with fraudsters.

Mr Raphael Musau, a private investigator with Hawk Eye Technologies says it is difficult for anyone to steal from a bank or defraud account holders without the aid of a bank employee.

"Outsiders do not know systems banks use to cash cheques or transfer money from one account to another. They must be informed by insiders who will then collude with them to steal from customers," he says.

CCI has learned that criminals in collusion with rogue workers find it easier to defraud account holders because of banks’ insistence of using signatures. Before transacting any business, for instance withdrawing money from an account over the counter, one must sign on a slip to sanction the transaction.

The signature is then compared with another specimen signature saved in the bank’s database.

Specimen signature

According to Musau, this method exposes banks to fraudsters. "It does not take long for a fraudster to master someone’s signature. A criminal will practice and perfect a signature and then using a forged identity card and with the help of a dishonest bank employee easily withdraw money from a victim’s account," he says.

Musau says all a criminal needs is for the employee to pass to them details of an account holder. These include their specimen signature, amount of money in the account and a photocopy of identity card.

Most of the accounts that are targeted, he says, are suspense and dormant accounts.

Suspense accounts temporarily hold money that is not in use or that which has not been determined where it belongs.

"Money in these accounts is ‘idle’, therefore this reduces chances of one being detected when they steal," he says.

In other instances, employees with their partners in crime, use cheques to defraud customers.

"They target cheques waiting to be cashed. An employee will get the details of the cheque and then pass them to their accomplices."

The criminal will thereafter practice the signature of the account holder and present a forged cheque and other documents to the bank.

"The bank employee will help him clear it and ensure that the original cheque is delayed to prevent detection," says the investigator.

He says that most victims of cheque frauds are corporate clients who have customised cheques and often pay numerous suppliers.

"An organisation will take time to detect the fraud because it operates several accounts, has huge monies in them and deals with numerous payments," he says.

According to the investigator, banks ignore crucial identification marks on people’s identity cards while dealing with customers, mostly the thumbprint.

Clear identity

"Banks and other financial institutions are only interested in customers’ identity card numbers, photos and signatures. These are not in anyway peoples’ identities. The fingerprint is the only mark that reveals someone’s identity," says the fingerprints expert.

"No fingerprint marks are identical and therefore chances of them being forged are nil," he adds.

Musau advises that to curb cases of fraud, banks should use fingerprints to identify customers.

"Once one presents his or her thumb print, it will be easier to detect whether it is genuine or fake by juxtaposing it with what is in the database," he says.

Police Spokesman, Mr Eric Kiraithe says an increase in fraud cases in banks cast aspersions on the quality of character of bank employees.

"The increase in theft cases confirms that banks employ some people with questionable character. We have urged them to vet their employees and put foolproof methods to protect their customers. For instance, before cashing a cheque, they must call the drawer and find out if they wrote the cheques. Some managers are now doing that," he says. He says that our criminal justice system also encourage the crime.

"Our laws are not deterrent enough especially when dealing with white collar crimes. People who steal from institutions are charged with the crimes but they do not return the loot. And some receive very light sentences. We should make commitment of crime expensive to deter others," he says.

Kiraithe acknowledges that the use of the thumbprint in banking procedures may aid to reduce cases of fraud.

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