Financial Crime World

Types of Financial Fraud Exposed in Jamaica: Banks Lose Nearly $1 Billion to Scammers

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Jamaica has been plagued by financial fraud, with banks losing nearly $1 billion to scammers. The Financial Investigations Division (FID) is actively probing 11 cases at two financial institutions that have potential exposure of hundreds of millions of dollars.

Schemes Exposed

Stolen Personal Data Scheme

Fraudsters gained access to sensitive information and transferred J$52 million and US$322,000 from several accounts without the account holders’ knowledge or consent. This scheme involves customers’ personal data being stolen and used to siphon off money from their accounts.

Merchant Fraud Scheme

This scheme targets merchants, allowing them to process refunds to debit or credit cards within days without having an original transaction. Millions of dollars have been lost by businesses across various industries due to this scheme.

FID’s Response

The head of the FID, Keith Darien, noted that the agency is seeing an unprecedented rise in fraud-related cases and that many of these crimes are enabled by persons connected to financial institutions. He warned that merchants who collude with fraudsters will ultimately be held liable for the transactions.

Anti-Fraud Measures

  • The Jamaica Bankers Association’s anti-fraud committee chairman, Dane Nicholson, urged business operators to ensure they follow established policies and procedures set out in their merchant agreement for processing specific transactions.
  • The FID has arrested and charged 16 persons for various criminal offences under the Proceeds of Crime Act (POCA).

Challenges Facing the FID

Staffing Issues

The FID is facing challenges in recruiting and retaining staff, including police personnel and financial forensic examiners, which impacts the timeliness of completing investigations.

Prioritization Needed

While some financial institutions submit high-quality reports of suspicious transactions, the FID noted that prioritisation needs to take place due to the large number of complex cases being investigated.