Financial Crime World

Barbados Faces Rise in Financial Crimes, Report Warns

Financial Fraud on the Rise in the Caribbean

The Caribbean region has witnessed a significant increase in financial crimes, including fraud schemes, over the past few years. According to a new report by Global Financial Integrity (GFI), these fraudulent activities have a far-reaching impact on the economic security of countries and the region as a whole, generating billions of dollars in illicit proceeds each year.

Barbados Affected by Financial Crimes

The GFI report highlights that Barbados is one of the countries affected by financial fraud. The island nation faces challenges in translating laws into effective enforcement actions against financial crimes. Experts estimate that Jamaica alone loses up to US$800 million annually to fraudulent activities.

Common Types of Fraud

Some of the most common types of fraud identified in the report include:

  • Lottery/Prize Scams
  • Online Shopping Scams
  • Romance Scams
  • Pyramid Schemes (often taking advantage of citizens’ comfort with “sou-sous”, a legitimate community savings practice)

Methods Used by Fraudsters

The methods used by fraudsters to contact victims vary depending on the type of scam, sophistication of the scheme, and type of victims involved. For example:

  • Lottery scams are largely phone-based
  • Romance scams are perpetrated online and through social media

How Proceeds are Moved

The report reveals that proceeds from these fraudulent activities are often moved through:

  • Cash Smuggling
  • Money Service Businesses
  • Bank Transfers
  • Trade-Based Money Laundering
  • Online Money Transfer Platforms

Cultural Barriers to Preventing and Investigating Fraud

Despite having laws in place to combat financial crimes, Caribbean countries face cultural barriers in preventing and investigating fraud. Some citizens may view government efforts to combat fraud as an attempt to prevent them from making money, while others may be hesitant to report victimization due to cultural stigma.

Recommendations for Combating Financial Crimes

The GFI report provides recommendations for the public and private sectors to combat financial crimes, including:

  • Assessing and improving awareness campaigns
  • Verifying individuals and companies registered to conduct business in a jurisdiction
  • Exploring tax legislation for civil asset forfeiture
  • Evaluating consumer protection legislation
  • Creating specialized courts for financial crime cases
  • Mitigating risk in a nuanced manner

Conclusion

The GFI report is part of a larger project that analyzes financial crimes in Latin America and the Caribbean. The initiative aims to understand financial crime threats in the hemisphere and provide effective solutions to combat these crimes.