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As forging signatures on stolen checks has become an
obsolete crime, the Federal Police Commission is
cautioning banks on the rise of a new technique to
defraud checking account holders.
"The techniques of fraud have changed," Alemayehu
Shiferahu, commander and head of the Commission
Forensic Department stated in his cautionary letter
written on November 12, 2007, to the National Bank
of Ethiopia (NBE).
In the emerging scheme, an individual opens a bank
account, and once issued a check-book, the
perpetrator changes the name printed on a check to
one matching the potential victim with an account in
the same bank. They then transform the check number
to an unused one and forge the signature using a
copy of the victim's old check obtained from sources
inside the bank.
As a precaution against forgery, banks had begun to
verify checks exceeding 50,000 Br. However,
according to the Commission, culprits now stay below
the alert threshold.
The police also claim that information on the volume
and account activity reaches the criminals through
employees of the banks.
The practice has become alarmingly widespread,
initiating the Commission to instruct the central
bank to warn commercial banks. Industry experts say
that the two banks most affected by the new fraud
technique are state-owned Commercial Bank of
Ethiopia, the country's largest bank, and Awash
International Bank S.C., which became the first
privately owned bank in Ethiopia when it opened in
1994. Fortune, however, was unable to
independently verify this.
Teklewold
Atnafu, governor of NBE, circulated letters attached
with the Commander's letter among all banks in the
country on November 16, 2007, instructing bankers to
contact account holders if suspicion is aroused even
if the amount to be withdrawn is less than 50,000
Br.
Tsegaye Tetemke,
president of Lion International Bank S.C, confirmed
that he received the letter sent by Teklewold and
told Fortune that copies would be dispatched
to all Lion branch offices.
According to police records, in 2004/05, 120 known
fraudulent checks were written involving around 35
million Br. However, these figures were more than
halved in 2006/07, to 50 checks involving about 10
million Br.
"Although our anti-fraud actions have worked in the
past, criminals get more creative, prompting another
round of cat and mouse," a commander from the
federal police said.
Controller Forum, formed under the Bankers'
Association (representing all 11 banks in the
country) a year ago, is the main source through
which police pursue such criminals. The Forum came
into existence to counter fraud through information
and experience sharing.
"Cooperation to prevent fraud benefits us all," one
bank president told Fortune.
The Forum also claims to have discovered a new form
of counterfeiting whereby individuals who win
tenders use bank guarantee bonds with a forged
letterhead, rubber stamp and signatures to get
advance payments.
"If we fail to combat fraud in coordination with
regional state bureaus, we will all end up losing,"
the bank president told Fortune.
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