Study shows fewer reports of fraud

A study done by the Financial Intelligence Unit (FIU) shows that there were fewer reports of fraudulent activity occurring in this country during the first 12 months of the COVID-19 pandemic.

That’s according to Kirk Taitt, Director of the Financial Intelligence Unit (FIU).

He made the revelation during the final edition of the Central Bank of Barbados and Financial Services Commission’s Domestic Financial Institutions Conference virtual seminar series entitled ‘Financial Fraud in Barbados’, noting that this reality was quite interesting, given that there were international warnings of increased fraud during COVID, and there were some countries which actually experienced a rise in such cases.

Taitt told the online audience that the report, which looked at the Suspicious Transaction Report (STRs) submitted to the FIU between March 2019 and February 2020, prior to the onset of the COVID-19 pandemic, were higher than those submitted during the March 2020 and February 2021 period. He explained that the FIU extrapolated data from in excess of 500 STRs over the two periods.

He added that in making the determination as to what was a fraud case, where fraud resulted in financial gain, even if that gain was returned or repaid or the person was prosecuted, it was considered a financial gain. Conversely, he said unsuccessful attempts were considered to be those where the perpetrators attempted the fraud, but it was aborted by them or thwarted at some point along the chain of execution by the financial institution.

“Now the findings that we came across were very interesting, because we would have thought that in the COVID context, you would have an increase in fraud. In fact, there was a report published by the FATF, the Financial Action Task Force, that warns countries that they should put measures in place to offset the potential risk of fraud occurring in a COVID context. So against that background we thought we should assess fraud for ourselves to determine if in truth and in fact we did have occurrences of fraud in the COVID environment, making a comparison of pre-COVID and during COVID,” he said.

He disclosed that during the first period they identified 65 matters with a dollar value of $4.8 million as attempts to gain money through fraud. Taitt stated that of those matters 22 were deemed to be successful totalling approximately $477,000. During the second period, from March 2020 to February 2021, Taitt said they identified 47 attempts at defrauding institutions and the dollar value was $1.4 million, and eight of those attempts were regarded as successful.

“So for us the total dollar value of fraud over those two periods was $6.2 million while the successful attempts totalled just under $600,000 or approximately 10 percent of the overall value,” he stated.

He said those figures indicate that the “appetite for fraud” here in Barbados, was perhaps not as high as in other countries, because we have seen a decrease in actual fraudulent attempts. The FIU Director went on to say that the other possibility is that the measures put in place by the stakeholders, such as the banks and credit unions, helped to ensure that their systems were not abused during the COVID crisis.

(JRT)