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72% of Banks Say Their Employees Committed Fraud
yahoi writes "The financial crisis appears to be exacerbating fraud by bank employees: a new survey found that 72 percent of financial institutions say that in the last 12 months they have experienced a case of data theft by one of their workers. Meanwhile, most banks don't want to talk about the insider threat problem and remain in denial, says a former Wachovia Bank executive who handled insider fraud incidents at the bank and has co-authored a new book called Insidious — How Trusted Employees Steal Millions and Why It's So Hard for Banks to Stop Them that investigates several real-world insider fraud cases at banks." The article dispels one assumption that might commonly be made about such insider fraud: "Interestingly, it's not the stereotypical offshore or outsourced employee who's most risky to their organizations. Nearly 70 percent of financial institutions say their full-time employees are most likely to pose an insider fraud threat..." Technology workers placed third in the roster of the job categories most abused.
If 72% of financial institutions say they've experienced data theft, how do "most banks" remain in denial? It sounds like "most banks" just admitted it.
Also, I'm not sure data theft is the same as fraud.
Is this really a case of it being unexpected? Banks, which handle lots of money and are generally unwilling to pay for honest talented staff see mishandled cash? What a surprise!
Next article, "Investment Bankers are overpaid for the returns they generate on their transactions!"
"Trust, but verify."
These people are in positions where they have to have access to the information to do their jobs. Locking them down so they can't get to the data without a partner would double labor costs (much more expensive than the 1-4% quoted in TFA.)
So the best answer is: give them the access they need, tell them you're logging it all, log it all, and *analyze the freakin' reports!* There are so many reports out there in most businesses that just get ignored. But we're talking about the early warning signs of theft, and they can't be ignored without consequences.
John
Seriously, if there are humans in involved and money involved, corruption ain't far behind.
www.voiceofthehive.com - Beekeeping and Honeybees for those who don't.
I'm pretty sure that it only the intersection of "actions which are illegal" and "actions which harm the bank's interests" counts as fraud for their purposes...
The thieves and pirates shouldn't seem surprised by the fact that their employees also take from them. The degraded ethical standard of the banking shell-game must be transparently obvious to those operating from within. Insolvent giants, with fraudulent assets, charge interest to loan out what they don't possess themselves, and award the tangible proceeds into executive compensation!
Taking from these bastards? It's like pulling a trinket off the dragon's horde.
Break the copiers, and sabotage the telex lines, while you're at it, folks!
"Speaking the Truth in times of universal deceit is a revolutionary act." -- George Orwell
Fractional reserve banking IS fraud!
"Speaking the Truth in times of universal deceit is a revolutionary act." -- George Orwell
They're in denial because they are not aware of the full seriousness of the issue.
I discovered something that amazed me. I was trying to resolve a client's quite simple software issue. I worked with managers of two large banks (tens or hundreds of thousands of commercial accounts). I discovered that one of the banks had no technically-knowledgeable employees, except for computer maintenance staff. They used contractors for everything else. The contractors with whom I talked had little technical knowledge.
The other bank had either no one who was technically-knowledgeable or just a few people.
They don't have just have problems with fraud, they have problems in every area where technical knowledge is needed. They cannot resolve modern problems because they have little or no knowledge of them, and they don't want to learn. Technically knowledgeable people are apparently seen as an annoying necessity.
With employees of a third large bank, at which I have personal and business accounts, I found that I could get a laugh by saying I saw their web site and thought that high school students should not write web sites for banks. Later the web site was improved.
Also, there is an alternative to fractional-reserve banking! It's called a "mattress". Fat lot of good it's going to do you (or anyone else, for that matter).
For the rest of us, we have FDIC insurance and that's really about as good as it gets in this day and age, unless you trust the commodity markets (and while they're a useful hedge, the "rah rah rah, gold is king" attitude is over the top and probably going to come back and bite a few people. Although it's not so much crazy as the people who suggest an "oil standard". Right, tie your currency to the whims of OPEC and Venezuela, and let me know how that works out for you...)
The World Wide Web is dying. Soon, we shall have only the Internet.
I guess it's only fraud when the bank is the one getting ripped off.
When they're handed hundreds of billions of dollars of taxpayer money to shore up bad debt and open up the faucet of commerce, but then instead decide to stop lending and hoard the cash... that's... something else? Right?
it's a jaded fact that corruption is quite common in every activities of humanbeings,not the least when the economy is in recession.the crucial problem is whether or not there have been an effective system to pull the plug on it.
OK, I'll play devil's advocate.
And yet... are most companys loyal to the employee? Fuck no! You're 100% replaceable. We don't really need YOU. Get back to work or you're fired.
You do realize that it costs somewhere in the neighborhood of 50% of a year's salary to replace an employee (post job ad, maybe pay headhunter, spend time reading resumes and conducting interviews, and pay relocation expenses for an employee that won't be productive for several months while getting trained and learning how the company operates), right? So, even from the point of view of pure greed, it's not a good idea to fire someone unless (1) they are a total fuck-up, (2) the company just doesn't have money to pay them, or (3) their job just doesn't need to be done anymore and there is no appropriate position to move them into.
Sick? Come to work anyway!
If you are truly sick, especially with something contagious, nobody in their right mind wants you to come to work because that makes things worse with everyone else getting sick. Now, how many times have you called in sick when you weren't?
You did such a great job on that project. have some perks! more money? no.
I agree. Compensation in anything but cash should be illegal. No more healthcare, dental, life insurance, or other bullshit. Give people cash, making their total compensation completely transparent, and let them spend it as they wish. Lobby your congressperson.
Nobody should be suprised that many employees have a crap attitude about their jobs. And will steal any chance they get.
Nobody should be surprised that many employers have a crap attitude toward employees who steal and otherwise jerk off at work. It's that chicken and egg problem.
And now with the economy fuckup. The first things to go are perks and pay raises. Yet you still want the same loyality from the employees.
If the company isn't bringing in as much money as it used to, due to the economy, what do you expect them to pay for the perks and pay raises with? Do you think they can just waive a magic wand and make money fall from the sky? You do realize that if the company goes bankrupt you lose your job, not just your raise and your perks, right?
We're gonna steal anything not bolted down. Get all we can before the company gets rid of us.
Causing the company to lose money even faster, and forcing them to get rid of you even faster.
$5.000 or $25.000 isn't that much - to you and me sure, it's alot of money, but compared to the bad press it's quite obvious why they decided to push it under the rug.
72% of banks say employees have committed fraud. Other 28% are lying or naive.
If shit gets that bad, I hope you're investing in bacon and not gold.
-The world would be a better place if everyone had a hoverboard
> FDIC insurance
Riiiight. When the government is bankrupt,
the value of the US dollar will drop to the same value as the Monopoly dollar, and you'll have much bigger problems on your hands than the movement of small green pieces of paper.
28% of banks are lying.
The other 72% are probably lying about the extent.
Slashdot social media options: AIM, ICQ, Yahoo, Jabber and Mobile Text. Why no MySpace?
Riiiight. When the government is bankrupt, it _can't_ payout.
If you really believe that the government will falter to such a degree that it will not be able to honor its FDIC obligations, I suggest you remove your funds from your bank, and put them into food storage, ammunition and firearms, and other dystopian future necessities.
Least in the old days you had _some_ assets to cover your debts, and one just couldn't "print" more pseudo-assets.
If you're talking about the dollar being backed by the gold standard, this is just as big of an illusion of security as current paper currency is. The only reason gold was ever considered valuable in the "old days" was due to its scarcity, and relying on an object's absolute physical availability to determine it's value is flawed in an economy of our size. If we tried to back the GDP of countries like the US, Canada, Russia, Europe, etc., with gold we'd have run out of the metal a long time ago.
The funny thing is that gold has only recently become really valuable as a commodity with the advent of integrated circuits and other electronic components that make use of it. If society really does degenerate to the point some people think it will all the gold in the world won't help you. People will need and want to trade for required things like ammunition, canned food, fuels, etc. After that comes the vices such as cigarettes, alcohol, and toilet paper. Gold is going to be waaay down the list.
If you're really worried about money for the post-apocalyptic society of tomorrow, I'd suggest you start collecting bottle caps.
"What do you despise? By this are you truly known." --Princess Irulan, Manual of Muad'Dib
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Actually, it is. When you sell a house to someone with no money, that's fraud. Especially when you know you're doing it.
Also something called "naked short-selling", which involves selling non-existent stock. It happens millions of times per day, everyone does it, and nobody complains. Bear and Lehman stock was counterfeited so rapidly, the stock plummeted to zero within days.
It's the thug life, right? No fraud in the hood. Drugs, guns, murder - that's just recklessness and stupidity.
If you really believe that the government will falter to such a degree that it will not be able to honor its FDIC obligations, I suggest you remove your funds from your bank,
if only they were redeemable in gold and silver as once US constitution stated...
If i am not mistaken recently FDIC announced that it has nowhere near the amount of money needed to meet its obligations, bacause situation in the bank sector is in much worse shape than they predicted - we are talking about tens or even hundreds of billions. What it means? More and more T-bills - so people will pay through the nose (taxes) for the illusory safety of their wealth or will be robbed of their purchasing power (money printing)
And if you want to see how the total decay of monetary system looks, just read about Zimbabwe with its few million percent inflation or look for some clips on youtube. People in Zimbabwe pay for their daily bread at the village market with gold and don't accept anything else as a payment for their merchandise.
Gold was, is and will universally recognized as something valuable in majority of cultures. Even world of Fallout wouldn't change it because there would be continuity of humanity and there would be no reason for gold to suddenly lose its cultural meaning - gold value is deeply entrenched in people's minds. That's more that what we can say about paper currency.
Oh, please. The collapse of the banking sector's not fraud. Recklessness, certainly, but don't attribute too much to malice when there's plenty of stupidity to go around. :P
Fraud doesn't imply malice, it implies greed.
All fractional reserve banking is fraud.
You know what? I seriously doubt it.
I think it's infinitely more likely that 28% of banks questioned said "No comment".
Shortly the manager offered to drop both charges. I told him no thanks, choke on your $70.
I would've let them drop the charges, and then close my account anyway.
Great. So, IT are proven incompetent for having such a gaping hole, and they're restructured. That means this guy loses his job (if he manages to keep hold of it) at least. At worst, his name is published and every single financial institution, Fortune 500 business, and recruitment company on the globe put a little black mark next to his name. Whistleblowing is great for everyone but the person doing it.
And please, don't tell me about all of the protections these folks get; Glass ceilings, awkward interview processes, and HR spin can cripple any application they want.
Finally had enough. Come see us over at https://soylentnews.org/
Nice ad hominem.
Regardless of the vagaries of reserve holding percentages, the arguments against the fundamental basis of a speculation economy - versus a capital investment economy - are sound. Capital speculation is the moral and functional equivalence of Ponzi. It produces no new value, only inflating larger numbers. There is, ultimately, someone who winds-up swindled. In the case of the recent "financial crisis", it is apparent that the swindled are the tax-paying populations.
Defending such a system as rational, moral and productive to the society in which it is allowed to operate? I would call that a delusional proposition. Those who do so exhibit something akin to Stockhausen Syndrome. Stockholder syndrome, perhaps? ;-)
"Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs."
--Thomas Jefferson letter to Thomas Cooper, 1814.
"Speaking the Truth in times of universal deceit is a revolutionary act." -- George Orwell
You forgot the can opener.
...sometimes, in order to hurt someone very badly, you have to tell that person terrible lies. - PA
Largest insolvent economy. Worthless army. Will they invade China? No. Northcom will, instead, be used to suppress revolt at home as the shit comes down and the birds come home to roost.
Everybody who is really concerned with the matter knows that in 36 months - or less - there will be NO ability by the US to pay. Empty promise on worthless paper.
Hence, the unprecedented activity of the past week:
http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html
http://news.bbc.co.uk/2/hi/business/8289302.stm
The insolvency of the principal banking houses happened 25 years ago - and was hidden behind successive speculative bubbles. The kind that say 1 share of Google is worth 475 USD of trade in real goods and services.
http://georgewashington2.blogspot.com/2009/10/real-reason-giant-insolvent-banks-arent.html
"Speaking the Truth in times of universal deceit is a revolutionary act." -- George Orwell