Financial Crime World

Jamaica’s Financial Fraud Plague: 25,000 Cases in 2022, Highest Level in Five Years

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The Bank of Jamaica (BOJ) has released its latest Financial Stability Report 2022, revealing a staggering increase in financial fraud cases across the island. According to the report, the number of fraud occurrences jumped by two-thirds from 15,000 to over 25,000 in 2022, the highest level seen in at least five years.

Credit Card Fraud Remains Prevalent

Despite a dip in the value of bank fraud losses to approximately $700 million in 2022, down from $1.3 billion in 2019 and $800 million in 2020, credit card fraud remains the most prevalent type of financial crime.

Internet Banking Fraud on the Rise

Internet banking fraud has gained ground, with criminals exploiting SIM-swap fraud to bypass two-factor authentication and gain access to online banking accounts.

Demographics of Bank Fraud Victims

Women Disproportionately Affected

Women are disproportionately affected by bank fraud, accounting for 51.6% of victims.

Age Group Most Vulnerable

Persons aged 35-50 were found to be the most vulnerable to financial fraud.

Factors Contributing to Rise in Financial Fraud

The number of fraud occurrences has been on a steady rise since the onset of the pandemic in 2020, with less than 5,000 instances reported in 2019 and over 25,000 cases recorded in 2022.

Credit Card Fraud Occurrences More Than Doubled

Credit card fraud occurrences more than doubled during this period.

Types of Financial Fraud

The report defines bank fraud as the use of unlawful means to obtain funds or other property owned by a financial institution or depositor. The BOJ listed six specific types of fraud relating to:

  • Fraudulent cheques
  • Credit and debit cards
  • Wire transfers
  • Loans
  • Internet banking
  • Internal or occupational fraud

Global Perspective on Financial Fraud

Globally, the International Organisation of Securities Commissions reported that 66% of its members experienced a rise in fraud since the pandemic, as individuals struggled with changes to their health and wealth.

Warning Signs for Jamaica’s Financial System

The BOJ warned that further inflationary pressures, associated increases in interest rates, and weakening global growth pose significant risks to Jamaica’s financial system in 2023.

Conclusion

Despite these challenges, the financial and tourism sectors were found to be resilient to stress tests related to a US recession, with the USA’s contraction expected to reduce its financial outflows to Jamaica.