Jamaica Under Siege: Credit Card Fraudsters Strike for Almost $1 Billion
Recent months have seen a significant surge in credit card fraud in Jamaica, with banking institutions reporting losses of nearly $1 billion due to exploitation of vulnerabilities in offline point-of-sale (POS) transactions, credit card refunds, and customer personal information.
The Schemes
Fraudulent offline POS transactions account for a substantial chunk of the losses, typically involving cloned cards and deliberate taking of POS devices offline. This allows fraudsters to process transactions worth millions of dollars without detection, with the merchant receiving only a small percentage of the transaction value.
In one instance, cybercrime experts revealed that fraudsters approach merchants offering to pay them for processing fake transactions, which are then refunded to cloned bank cards controlled by the fraudsters. This scheme is “very prevalent and lucrative” for fraudsters and has been used to fleece millions of dollars in goods and services from merchants across several industries.
The Warning
The Jamaica Bankers Association’s anti-fraud committee chairman, Dane Nicholson, warned merchants against colluding with fraudsters, stating that they will ultimately be held liable for the transactions. He also urged business operators to ensure they follow established policies and procedures set out in their merchant agreement for processing specific transactions.
The Investigation
Meanwhile, the Financial Intelligence Agency (FIA) has reported an “unprecedented rise” in the number of fraud-related cases being referred for investigation. Principal Director Keith Darien acknowledged that some financial institutions submit “high-quality” reports of suspicious transactions, but noted that the entity is finding it difficult to recruit and retain staff, including police personnel and financial forensic examiners, which impacts the timeliness of completing investigations.
The FIA has arrested and charged 16 persons for various criminal offenses under the Proceeds of Crime Act (POCA) in relation to the schemes. However, Darien emphasized that no stone is left unturned in bringing perpetrators to justice.
Measures Implemented
Banks have implemented measures such as verified and/or delayed refunds to spot and cancel suspicious transactions in time. The FIA has also warned financial institutions to submit high-quality reports of suspicious transactions and to prioritize investigations.
As the country grapples with this unprecedented crisis, it remains to be seen how effective these measures will be in preventing further losses and bringing fraudsters to justice.
Key Takeaways
- Credit card fraudsters have exploited vulnerabilities in offline POS transactions, credit card refunds, and customer personal information, resulting in losses of nearly $1 billion.
- Fraudulent offline POS transactions account for a significant chunk of the losses, involving cloned cards and deliberate taking of POS devices offline.
- The Jamaica Bankers Association has warned merchants against colluding with fraudsters and urged business operators to follow established policies and procedures for processing specific transactions.
- The Financial Intelligence Agency has reported an “unprecedented rise” in fraud-related cases and is working to bring perpetrators to justice.