Collin Greenland | Anticipate increased fraud from remittance decline

The pandemic emergence of Severe Acute Respiratory Syndrome Coronavirus, yes, the same dreaded coronavirus now terrorising the planet, has not been spared by fraudsters who, like vultures descending on carrion, are now engaged in a multiplicity of fraud schemes trying to exploit the public or harm the vulnerable during this time of international distress. Authorities worldwide, such as the World Health Organization, Federal Bureau of Investigation (FBI), the Centers for Disease Control and Prevention, the Food and Drug Administration and the Environmental Protection Agency, plus the European Commissioner For Justice and Consumers, have all had to ramp up their anti-fraud sensitisation efforts. The FBI has also warned about phishing emails asking persons to verify their personal information in order to receive an economic stimulus cheque from the United States (US) government or claiming to be charitable contributions, general financial relief, airline carrier funds, offers of fake cures/vaccines, providing information about the virus, donating to a charity, contributing to a crowdfunding campaign, selling products online, offering fake testing kits and counterfeit treatments or equipment – the list is almost endless.

Tragically, but not surprisingly, these fraudsters are targeting counterfeit treatments or equipment. The FBI, for example, has advised caution when buying products that claim to prevent, treat, diagnose or cure COVID-19 and point out that popular counterfeit products have included sanitising products, N95 respirator masks, goggles, full-face shields, protective gowns, gloves, and other forms of personal protective equipment. European regulators have not been idle and are asking a wide range of digital platforms, social networks, search engines, and online marketplaces to take tougher action against scams related to COVID-19.

PROJECTED DECLINE

Early in the year, The Gleaner referred to the World Bank’s update on remittance, details of which can be found in the paper titled Migration and Development Brief 32: COVID-19 Crisis through a Migration Lens. Accordingly, the World Bank indicated that “Based on the trajectory of economic activities in large migrant-hosting countries, especially the United States, European countries, and the Gulf Cooperation Council countries, remittance flows to low- and middle-income countries are projected to decline by 7.2 per cent, to $508 billion in 2020, followed by a further decline of 7.5 per cent, to $470 billion in 2021. The projected declines in remittances are the steepest in recent history, and steeper than the five per cent decline recorded during the 2009 global recession. The foremost factors driving the decline in remittances are weak economic growth and employment situation in migrant-hosting countries, a weak oil price, and exchange rates of the currencies of remittance-source countries against the US dollar.”

Consistent with this, The Gleaner has been dutifully reporting feedback from the Bank of Jamaica, Planning Institute and Jamaica Money Remitters Association, tracking the decline in remittances. Remittances are the second-largest source of income of Jamaica, contribute over 18 per cent of gross domestic product, with US$2.4 billion sent back from family and friends mainly through six remittance companies such as the market leader, Western Union.

COVID-RELATED CHALLENGES

With job losses, income decline and other COVID-related challenges, it is not far-fetched to anticipate that the survival instincts of some may incorporate new or increased acts of fraud and other white-collar crimes to endure this pandemic. The components of the well-established ‘Fraud Triangle’ developed by criminologist, Donald Cressey, may well see increased levels of defalcations attempted by business persons and employees, manifested through their notions of ‘Opportunity’, ‘Pressure/Motive’ and ‘Rationalisation’. Although it may be too early to empirically distinguish between the level of remittance flowing in Jamaica, and the incidence of fraud, it would be judicious to anticipate a related increase in the latter as the former declines. Jamaicans are already complaining about rapacious price gouges being experienced from mercenary business persons. However, since many Jamaicans are increasingly immersed into today’s ubiquitous online culture, we must also acquaint ourselves to all of these COVID-19-related scams, plus be aware of the possible effects of declining remittances. Vigilance must be the order of the day so all the established cyber-protective, preventative and mitigating mechanism must now be stringently adhered to lessen our vulnerabilities. Anti-fraud policies, whistle-blowing policies, and fraud risk assessments, if not already in place, should all be standard tools in the arsenal of all enlightened organisations.

It would be a shame if after surviving this dreaded coronavirus pandemic, unscrupulous persons create another dilemma by decimating our financial coffers. Please keep safe!

Collin Greenland is a forensic consultant. Email: cgreeny.collin@gmail.com