Flag fraudsters in your sector – Zeija tells Bankers

 

BY PAUL TENTENA

Uganda’s Principal Judge Flavian Zeija has advised bankers through their umbrella body Uganda Bankers Association to flag and publish widely all suspected fraudsters in their sector, which he believes will help curb financial fraud.

Zeija, who was discussing the topic ‘Strengthening Legal and Enforcement measures to fight fraud’ during the Second Financial Fraud Forum in Kampala said to fight financial fraud, all banks and financial institutions must unify their efforts.

“Since you have the Know Your Customer Strategy, you should have the Know Your Staff Mechanism and flag all fraudsters in your industry,” said Zeija at the Forum that ran under the theme of ‘Collaboration against fraud targeted at the Banking and Payment Services Ecosystem.’

According to a survey that was conducted by the Uganda Bankers Association and VISA, loan related fraud was the biggest type of fraud they recorded in June at 46.5% while in March this year, card related fraud, digital, mobile and cyber frauds were the highest at 48.2%.

Ligomarc Advocates, led by Olivia Kyarimpa, a Legal Counsel also conducted a survey where they found a couple of loopholes in fraud prevention and remediation like emerging fraud related activities/trends not yet being criminal offences in Uganda, exceeding authorized access to computers, damaging of computers or data thereon, password trafficking and corporate liability for fraud.

They also found that punishments for fraud related criminal offences are not deterrent enough and that the laws do not provide for minimum sentences.

Ligomarc Advocates in their survey also noted that there is low rate of convictions due to poor evidence gathering and storage, lack of evidence management and preservation policy and lack of confiscated fraud asset management strategy and policy/regulation

“There is no specific funding mechanisms for capacity building, investigations, prosecution, asset tracing and recovery, no comprehensive cyber security legal framework and no international mutual co-operation agreements on cyber security,” said Kyarimpa.

She said according to ACFE Global report 2024, organizations lose 5% of revenue to Fraud each year. A total of 1,921 cases were reported with a total loss of USD 3.1 Billion at an average of $ 1.7 Million.

“For Uganda, the 2023 Annual police report recorded a loss of

Ushs.1.8trn in economic and corruption crimes. Only 80bn was

recovered. Combating fraud before it occurs is vital to the survival of any business,” said Kyarimpa.

While responding to Ligomarc Advocates Survey, Zeija said investigating and prosecuting financial crimes is complex. This is because the financial sector itself is complex.

“Payment fraud, Identity theft, Card fraud, Account fraud and Account takeovers, Online fraud and Investment scams evolve every day. Proper documentation and safety of that documentation, Proper Audit trails and an independent audit report are needed as well as internal Control mechanisms,” said Zeija.