Financial Crime World

Jamaica on High Alert: Types of Banking Scams Exposed

Online Fraud Reaches Alarming Levels in Jamaica

The Bank of Jamaica has reported that over $150 million was stolen from local bank accounts between January 2020 and December 2021 through online fraud. The Jamaica Bankers Association (JBA) has sounded the alarm, highlighting two principal causes of the problem: money muling and phishing.

Types of Banking Scams

The JBA has identified several types of banking scams that have been plaguing Jamaicans:

  • Money Muling: Scammers trick victims into transferring money from their bank account.
  • Phishing: Scammers try to trick victims into revealing sensitive information, such as passwords or credit card numbers.
  • Lottery and Sweeps: Scammers promise unrealistic winnings and ask for money to be transferred to fraudulent accounts.
  • Charity Money Scam: Scammers pose as charity representatives and ask for donations to fraudulent causes.
  • Stranded Traveller: Scammers claim to be stranded travelers in need of financial assistance.
  • Online Dating: Scammers use online dating platforms to build trust with victims and steal their money.
  • Social Media Fraud: Scammers use social media to spread malware, phishing links, or trick victims into revealing sensitive information.

Measures to Combat Schemes

To combat these schemes, JBA members are implementing new standards to protect customers against potential money transfer scams:

  • Pinpointing Vulnerable Customers: Banks will identify and target specific customer groups that may be more susceptible to fraud.
  • Delaying or Freezing Suspicious Payments: Banks will delay or freeze suspicious payments to give them time to investigate and confirm the legitimacy of the transaction.
  • Introducing Confirmation of Payee (COP) Checks: The COP system checks that the payee name entered into the transaction matches the name registered to the account, preventing fraudulent transactions.

The Importance of Customer Education

According to Richard Murray, Executive Director of JBA, “The vast majority of online fraud is external to the bank, usually related to social engineering events, such as phishing, where customers inadvertently volunteer sensitive information.” He emphasized that customer education campaigns are crucial in preventing these types of scams and that banks will continue to advise customers on potential exposures.

Targeting Young People

The JBA warns that young people, particularly those under 25 with no criminal record, are increasingly being targeted on social media with “get rich quick” schemes that involve money muling. These individuals may be unaware that they are committing a crime by allowing their accounts to be used for fraudulent activity, which can result in imprisonment and impact future employment opportunities.

Enhanced Monitoring Tools

In response to these scams, JBA members will continue to implement monitoring tools across the banking networks to identify fraud events more quickly, making banking generally safer for Jamaicans.