Financial Crime World

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Jamaica’s Banking Sector Haunted by Fraudulent Activities Worth $700 Million to $800 Million Per Annum

Losses Estimated Between $700 Million and $800 Million Annually

According to Dr. Jide Lewis, deputy governor of the Bank of Jamaica (BOJ), fraudulent activities in Jamaica’s banking sector have resulted in losses estimated to be between $700 million and $800 million annually.

Current Level of Fraud Down Compared to Previous Years

Lewis made this disclosure during a seminar on anti-money laundering held by the Jamaica Institute of Financial Services and the Jamaica Bankers Association. While acknowledging that Jamaica’s banking sector is not doing badly relative to other jurisdictions, Lewis emphasized that there is still room for improvement.

Strengthening Regulatory Framework to Combat Money Laundering and Terrorist Financing

The BOJ has been working to strengthen its regulatory framework to combat money laundering and terrorist financing. The country has committed to completing 13 action items by summer in order to be removed from the Financial Action Task Force (FATF) grey list.

Recent Ruling Upholds Government’s Right to Require Lawyers to Report Suspicious Transactions

Lewis also referred to a recent ruling by the UK Privy Council, which upheld the government’s right to require lawyers to report suspicious financial transactions under the Proceeds of Crime Act. This ruling is seen as significant for Jamaica’s efforts to get off the FATF list.

The BOJ has conducted a study on banking fraud among its eight deposit-taking institutions, which found that fraud losses averaged $1 billion per annum between January 2018 and October 2021. The study defined fraud as unlawful means to obtain funds or property and identified major frauds as originating from internal staff, internet banking, loans, wire transfers, and others.

Credit and Debit Card Fraud Accounts for Most Incidents

The findings showed that most incidents related to credit and debit card fraud, with an estimated total of $3.3 billion or four-fifths of the total fraud losses.

Key Takeaways

  • Annual fraudulent activities in Jamaica’s banking sector range from $700 million to $800 million.
  • The current level of fraud is down compared to previous years.
  • The BOJ has been working to strengthen its regulatory framework to combat money laundering and terrorist financing.
  • A recent ruling by the UK Privy Council upholds the government’s right to require lawyers to report suspicious financial transactions.