Financial Crimes Wreaking Havoc on Irish Economy
A Staggering Amount of Financial Crime Plagues the Irish Economy
Hundreds of millions of euros are lost every year due to financial crimes in Ireland. From deepfake messages seeking money to more menacing money-laundering activities, financial criminals are using increasingly sophisticated tactics to get their hands on illegal funds.
The Scope of Financial Crime
According to Colm O’Flaherty, a director with Deloitte’s Financial Crime Advisory team, financial crime covers a wide range of illegal activities, including:
- Theft
- Fraud
- Bribery
- Corruption
These crimes have a devastating impact on every individual in Ireland, driving up taxes and the cost of goods and services.
Forms of Financial Crime
KPMG managing director and Forensic team leader Katherine Gillespie notes that financial crime takes many forms, including:
- Online fraud
- Payment-card fraud
- Phone scams
- Investment-related scams
These crimes not only harm individuals but also have a devastating impact on communities, enabling and perpetuating other forms of criminality.
The Rise of Technology Facilitates Financial Crime
The rise of technology has made it easier for criminals to commit financial crimes. The Daniel O’Donnell scam, which used deepfake technology to replicate the TV presenter’s voice and image, is just one example of how sophisticated criminals can be. Money mule activity is also on the rise in Ireland, with Deloitte estimating that €17.5 million was passed through mule accounts in the first half of 2023.
Consequences of Giving Account Details to Financial Criminals
Gillespie warns that if individuals give their account details to financial criminals, they are committing a crime and could face serious consequences, including being barred from obtaining a US visa. The impact on victims is even more severe, with many losing hard-earned money that can ill afford to be lost.
The Impact of Financial Crime
Financial crime has a twofold impact on communities:
- Diverting public resources away from productive activities and investment that could benefit local communities
- Transcending borders, making it difficult to investigate and prosecute crimes, resulting in many instances going unpunished
Preventing Financial Crime
The first line of defense against financial crime lies with the individual, says O’Flaherty. He advises individuals to:
- Be cautious when engaging with strangers online or on the phone
- Seek out information from trusted sources before taking any action
O’Flaherty also highlights a hole in Ireland’s defenses, noting that there is no mechanism for information sharing between banks and institutions, making it easier for criminals to evade detection.
Changing Attitudes Towards Financial Crime
Gillespie believes that a change in attitudes towards financial crime could help reduce activity levels. She advocates for better education and awareness campaigns to make individuals more vigilant and to change the mindset of those who may view financial crime as victimless.
Working Together to Reduce the Impact of Financial Crime
As O’Flaherty notes, some level of financial crime will always be present, but by working together and sharing information, Ireland can reduce its impact and prevent further harm.