You recently ran two pieces on online fraud (Opinion, August 20; and Inside Business, September 10). This is one of the biggest financial crime threats facing all our societies, and is widely under-reported by victims.
The Association of Certified Anti-Money Laundering Specialists estimates that fraud scams and bank fraud caused $485.6bn in losses globally in 2023; that in Europe 80 per cent of reported frauds are cyber-enabled and that cross-border fraud rates are nine times higher than for domestic fraud.
Luckily, financial intelligence units and regulators of major countries are aware of the threat and taking measures, both by “following the money” and educating the public.
One recent example is the successful investigatory efforts of Tracfin, the French financial intelligence unit, which in 2023 froze six times more suspicious transactions than in 2021 and 2022 combined, part of France’s efforts to curb subsidies fraud, VAT fraud and social security fraud.
Payment institutions, normally payment originators (banks, electronic money institutions) should make use of all the guidance provided by the authorities to enhance their detection and prevention systems to stop suspicious payments and report them to the authorities.
And finally, potential victims need to be aware of the risk and identify fraud attempts. Of late some US states (California, Pennsylvania and Connecticut) have begun taking legislative measures to force financial institutions to protect their elderly clients by allowing banks and credit unions to suspend or delay payments if the bank suspects exploitation, theft or fraud.
Ultimately, investigators and police rely on victims reporting the crime and on financial institutions reporting on suspicious activity that they observe.
Leonor Vereda
Consultant and Former Financial Crime Compliance Officer, UBS
Basel, Switzerland
