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.

Comments

I Could Be a Fraudster

[Anonymous Coward]

I'm a contract employee at one of the top ten banks in the nation, employed in website development. Within the first week I was given the keys to the kingdom in spite of the bank never even performing a rudimentary background check. Also in the first week, I discovered that it would be absolutely trivial for me to steal the credentials of every single user of the site and completely cover my tracks. It has now been MONTHS since I brought it to the attention of the people who I answer to and there is still not even a proposed solution to the problem. Scarier still is that any one of 75-80 people could do this and it does not even require collusion. This to me shows the "high regard" that banks have for your money.

Personal Experience

[Tablizer]

I've seen this happen to a co-worker. She was generally quite out-going and talkative. But she started being quieter over time. One day it was announced that she no longer worked at the company, and through the rumor mill I found out that she had embezzled about 5 grand (mid 90's dollars) with the help of her boyfriend. She discovered by accident that some vendors would double-pay an invoice if a second copy was sent by mistake. Thus, she decided to send fake invoices to vendors with a history of double-paying, but with her boyfriend's bank account as the bill-to address of the 2nd copy. Eventually somebody noticed the bogus addresses.

The problem is that they didn't file formal charges because they wanted to protect the reputation of the company. They did confiscate all her future benefits, though; so it was probably a net loss to her.

However, by not prosecuting they set themselves up for a second attack. For another employee of the same accounting department made off with about 25 grand a few years later. I'm sure the second guy factored in the non-prosecution of the first attempt.

I'm not sure how to solve it, other than perhaps making prosecution mandatory. But I doubt companies want that kind of legal complexity for gray areas or where the evidence is weak.

Maybe some kind of "secret victim list" in prosecution, but that goes against the concept of jury-by-peers. The chance of one out of 14 jurors (with 2 alternates) spilling the beans is fairly high. And there's other issues with public disclosure laws.
   

I have NEVER seen...

[ibsteve2u]

an argument that started with the word interestingly:

"Interestingly, it's not the stereotypical offshore or outsourced employee who's most risky to their organizations.

that was not somebody attempting either a subterfuge or the implantation of a subliminal suggestion.

You see, it may very well be true that "offshore" employees in banking have less culpability, thus far...which - entirely coincidentally, I'm sure - corresponds directly to the amount of penetration into banking that offshoring has - thus far.

Interestingly, don't you think that such statistics provide a a nifty argument for offshoring banking?

Who gathered and "analyzed" this "data", again?

Re:Fraud by bank employees is nothing new

[tunapez]

I was trying to determine all the fees involved in Chase Bank's "FREE" checking a couple weeks ago. I asked what the minimum balance and specific performance were required to get that "FREE" checking? The yanker said no minimum and I did not have to do anything. Half way through the process the yanker mentioned if I did not use my debit cards some 10(?) times in a month there would be a $6 fee. I asked him if he knew what specific performance meant and do you lie and tell half-truths to your friends and family too? He laughed like it was a funny joke. I walked to the credit union, where I should have started.

Wells Fargo last year hit my checking account w/ 2 x $35 charges for $6 and $11 transactions, unknown to me my DD was 3 days late while on the road and I was not paying some monthly charge to auto-transfer or over-draft protection. I asked to set my account to deny ANY transactions when funds were not available so I would be aware of and remedy the situation. They told me the account didn't work like that but I could pay for those services and they would credit me one of the charges. I grabbed a withdrawl slip and wrote it to the balance of my savings, $9k and change. Shortly the manager offered to drop both charges. I told him no thanks, choke on your $70. ***Until the CU, I continued to use the checking, for cashing checks. If they need to hold overnight I pick the cash up in the a.m. and never carry more than a $5 balance.

F the banks, bunch of crooks and liars.