Jamaica Hit with Multiple Financial Fraud Cases, Resulting in $1 Billion Losses

A recent surge of fraudulent schemes in Jamaica has left local banking institutions and their customers reeling, with estimated losses reaching over $1 billion.

Fraudulent Schemes Uncovered by FID

The scams, which involve credit card refunds, personal data breaches, and merchant collusion, have been uncovered by the Financial Investigations Division (FID) and are being investigated. According to sources within the FID, 11 cases at two financial institutions have “potential exposure of hundreds of millions of dollars” and more cases are expected.

Arrests and Charges Made

The agency is actively probing these cases and has already arrested and charged 16 individuals for various criminal offenses under the Proceeds of Crime Act (POCA).

Sensitive Data Breaches

One particularly sinister scheme involves fraudsters gaining access to sensitive personal data, allowing them to siphon off large sums from customer accounts. In one instance, J$52 million and US$322,000 were stolen from several accounts.

Credit Card Refund Scheme

The credit card refund scheme is also proving lucrative for fraudsters, with banking insiders describing it as “very prevalent and lucrative.” In this scam, merchants are duped into processing refunds to debit or credit cards without an original transaction. The cashback is then sent directly to cloned bank cards held by the fraudsters.

Measures Implemented to Combat Fraud

To combat these schemes, financial institutions have implemented measures such as verified and/or delayed refunds to spot and cancel suspicious transactions in time. However, the FID has noted that some institutions still submit “high-quality” reports of suspicious transactions, while others struggle to recruit and retain staff, including police personnel and financial forensic examiners.

FID Director’s Statement

“The agency is seeing an unprecedented rise in the number of fraud-related cases being referred for investigation,” said Keith Darien, principal director of the FID. “Our intelligence is pointing to the fact that a lot of the fraud being encountered is enabled, in some way, by persons connected to the financial institutions.”

Anti-Fraud Committee’s Warning

The Jamaica Bankers Association’s anti-fraud committee has also issued warnings to merchants against colluding with fraudsters, emphasizing that they will ultimately be held liable for the transactions. The committee urges business operators to ensure they follow established policies and procedures set out in their merchant agreement for processing specific transactions.

Next Steps

As authorities continue to investigate these cases, it remains to be seen how they will bring the perpetrators to justice and prevent future fraudulent activities from occurring. In the meantime, financial institutions are urging customers to remain vigilant and report any suspicious activity to the relevant authorities.