Avia Collinder, Business Reporter
Institutional changes made by big players in the remittance market to curtail the lottery scam appear to have affected money transfers, according to the Bank of Jamaica.
Remittance inflows between January and April declined by 1.8 per cent year-on-year to US$672.7 million, according to the central bank. In the month of April itself, inflows were flat at US$180 million.
The lottery scam perpetuated on foreigners, who are asked for upfront payments to collect non-existent lottery winnings, has forced risk assessment and rule changes that have been ongoing for a year at remittance companies.
Last August, some 13 Western Union branches were closed temporarily after allegations that the outlets were being used as collection points by perpetuators of the lottery fraud which was localised in western Jamaica parishes.
GraceKennedy Group, which owns the Western Union franchise, placed new conditions on funds that could be collected from outlets in western Jamaica in February. MoneyGram agents also followed suit.
Beyond the period reported on by the central bank, most recently, on August 7, JN Money Remittances Limited implemented new rules for persons who live in the parishes of Westmoreland, Hanover, St James and Trelawny now required to produce two pieces of national identification and proof of taxpayer registration for collections above J$100,000.
Additionally, persons collecting funds of J$150,000 or more must present proof of their address, in addition to two pieces of identification and their TRN.
Leesa Kow, managing director of JN Remittances, said the measures did not come at the behest of the central bank.
"The measures were put in place to protect our customers," Kow said on Wednesday. JNMS operates 18 JN Money Transfer locations in Westmoreland, Hanover, St James and Trelawny.
New procedures were also implemented on August 7 for persons in the US sending funds to Jamaica from any of the 76 JN Money Transfer locations in the US. For amounts of US$999.99 or more, the remitter is required to identify the source of funds. In addition, persons using JN Money Transfer for the first time are required to produce identification when sending funds to Jamaica.
At Western Union, transactions of US$400 or more sent through Western Union to recipients in the parishes of St James, Hanover, Westmoreland, Trelawny, St Ann, and St Elizabeth are now routinely reviewed and subject to approval by the GKRS Call Centre before payout.
In the event that the transaction is not approved, the money will be refunded to the sender.
New systems implemented by MoneyGram include a requirement that transfer recipients in the same parishes produce utility bills as proof of address before they are permitted to collect remittances. MoneyGram also does not give transfers to individuals living out of parish.
Kow said at a public event that now that loopholes have been shut, scammers are turning to postal and courier services to rout scam proceeds and are also directing their victims to purchase and ship electronics and appliances, which are then sold by scammers for cash.
The remittance market remains relatively healthy, especially with the pickup of jobs in Jamaica's main remittance market — the United States. Bank of Jamaica notes that inflows for the January-April period are still above the average of US$634.4 million for the corresponding periods going back five years.
BOJ noted in its quarterly monetary report that employment among migrants is seeing mixed results, with some sectors improving marginally and others, such as leisure and hospitality, declining.
The pace of growth in remittances to the region and Jamaica has decelerated since 2007. Notably, there was an average annual decline of 4.3 per cent in remittances over the 2008-2009 global crisis periods relative to growth of 11 per cent for 2007.
Up to December 2012, remittance flows represented approximately 13.8 per cent of Jamaica's GDP. The inflows for the full calendar year amounted to US$2.037 billion, which was less than one per cent growth relative to calendar 2011.