Financial Crime World

Jamaica: Financial Investigations Division Unveils “Concerning” Trend of Refund Fraud

Kingston, Jamaica - The Financial Investigations Division (FID) has identified a concerning trend in Jamaica’s financial sector, referring to it as “refund fraud.” According to a recent release, over 120 instances of refund fraud were uncovered from January to June 2023, with a monetary value exceeding J$133 million.

Key Findings

  • Over 120 instances of refund fraud were discovered between January and June 2023.
  • The fraudulent activities involved 140 individuals who targeted 135 overseas merchants.
  • Investigations revealed that the perpetrators are distributed across all parishes, with Kingston & St Andrew and St Catherine accounting for over half of the transactions.

FID Response

In response to these findings, the FID has engaged relevant stakeholders in the financial sector to disseminate information about the trend and provide effective mitigating strategies. The division has also supported financial institutions and designated non-financial institutions in identifying key indicators related to refund fraud and equipping compliance officers with insights into observed techniques and trends.

Statement from Keith Darien

Keith Darien, principal director of investigations at the FID, commented on the issue, stating that “as countries and their respective financial sectors improve their anti-money laundering (AML) framework, we observe a corresponding evolution in the tactics employed by fraudsters.” He added that substantial efforts are underway to combat refund fraud and bring perpetrators to justice.

Recommendations

The FID strongly recommends that financial institutions and designated non-financial institutions exercise heightened caution, including:

  • Reinforcing monitoring systems
  • Implementing “red flag” mechanisms within their AML frameworks to identify and prevent transactions of this nature

By taking these measures, financial institutions can better protect themselves against refund fraud and ensure the integrity of Jamaica’s financial sector.