Financial Crime World

Financial Fraud in Jamaica: A Staggering Annual Loss of $700-800 Million

According to Dr. Jide Lewis, Deputy Governor of the Bank of Jamaica (BOJ), financial fraud in Jamaica results in an annual loss of $700 million to $800 million. This figure is significantly lower than the country’s previous average annual loss of $1 billion, as revealed by a BOJ study covering a 46-month period ending in 2021.

The Impact of Financial Fraud on Jamaica’s Economy

Financial fraud has a significant impact on Jamaica’s economy, with losses totaling $700-800 million annually. This amount is staggering and highlights the need for improved measures to combat financial fraud.

Regulatory Framework Strengthening Efforts

The BOJ has been working to strengthen its regulatory framework, particularly in light of ongoing investigations into alleged fraud cases, such as those involving boutique securities firm Stocks & Securities Limited. The central bank is also extending its oversight from banks to non-bank financial companies and pension funds.

FATF Grey List Status

To get off the Financial Action Task Force’s (FATF) grey list, Jamaica needs to complete 13 action items by summer. The FATF has been monitoring the country’s progress since January 2020 and will meet with Jamaican officials later this month to assess their compliance.

Recent Developments

  • A recent UK Privy Council ruling handed down against the Jamaican Bar Association has implications for the country’s anti-money laundering efforts. The ruling states that lawyers in Jamaica must report suspicious financial activity, and failure to do so will result in sanctions.
  • The BOJ conducted a study on banking fraud among its eight deposit-taking institutions, which found that average annual losses over a three-year period were $1 billion.

Study Findings

The study defined fraud as unlawful means to obtain funds or property and identified major fraud types, including:

  • Internal staff
  • Internet banking
  • Loans
  • Wire transfers
  • Others

Cumulatively, fraud losses totaled $3.9 billion, with reports of over 37,000 incidents of fraud during the 46-month period studied. Most of these incidents were related to credit and debit card fraud, which accounted for approximately four-fifths of total fraud losses.

Combating Financial Fraud

Jamaica’s efforts to strengthen its financial framework aim to demonstrate that the country can effectively combat money laundering and terrorist financing. The BOJ’s goal is to ensure that all stakeholders, including lawyers, investigative agencies, and judicial officials, have access to necessary information to support these efforts.

Conclusion

Financial fraud in Jamaica is a significant problem that requires immediate attention. With an annual loss of $700-800 million, it is crucial that the country takes steps to strengthen its regulatory framework and combat financial fraud effectively.