Jamaica’s Financial Fraud Scene: Number of Incidents Soars, Value Dips Slightly
The Bank of Jamaica’s recent Financial Stability Report reveals a concerning trend in financial fraud incidents in Jamaica. While the value of bank fraud has dipped to a five-year low of approximately $700 million in 2022, the number of fraudulent occurrences has jumped by two-thirds from 15,000 to over 25,000.
Credit Card Fraud Dominates
Credit card fraud continues to be a significant problem, accounting for 70% of losses. Criminals are using various methods to bypass security measures, including exploiting vulnerabilities in online banking systems.
Internet Banking Fraud on the Rise
Internet banking fraud is also increasing, with fraudsters using SIM-swap fraud to access online banking accounts. This type of fraud has become a significant concern, as it allows criminals to take control of victims’ online banking accounts and make unauthorized transactions.
Demographics of Bank Fraud Victims
The report highlights that women are more likely to be victims of bank fraud, making up 51.6% of those affected. Additionally, persons aged 35-50 are the primary targets.
Causes of Decline in Losses
The Bank of Jamaica attributes the decline in losses to improved security measures implemented by financial institutions and the introduction of chip encryption in cards. This highlights the importance of financial institutions investing in robust security systems to protect customers’ funds.
Increase in Fraud Occurrences Since Pandemic
The report notes a significant increase in fraud occurrences since the onset of the pandemic, with less than 5,000 instances reported in 2019 and over 15,000 in 2020. Credit card fraud occurrences more than doubled during this period.
Types of Bank Fraud
Bank fraud is defined as the use of unlawful means to obtain funds or property owned by a financial institution or depositor. The report lists six specific types of fraud:
- Fraudulent cheques
- Credit and debit cards
- Wire transfers
- Loans
- Internet banking
- Internal or occupational fraud
Global Trend
The rise in fraud is not unique to Jamaica, with international bodies reporting an increase in fraud cases globally since the pandemic. The Bank of Jamaica notes that financial institutions must remain vigilant in combating fraud and implementing effective security measures to protect customers’ funds.
Financial System Resilience
In related news, the Bank of Jamaica’s Financial Stability Report 2022 also highlighted the resilience of Jamaica’s financial system to external shocks, including a potential USA recession. Stress tests revealed that the financial sector can withstand adverse scenarios involving further interest rate hikes and an external recession.