‘Tis the season of laughter, love and…larceny? While holiday cheer spreads joy and peace, this is the time to remember crime will increase. From unwitting victims who had one-too-many eggnogs, to the solicitation that pulls at the heartstrings, these are a few of the favored criminal rings that the anti-money laundering (AML) industry and client managers should be mindful of this holiday season.
With generosity abound, duplicitous schemes will do their best to solicit a charitable donation for an uplifting but nonexistent cause. Solicitations by phone and email are quite common and the willingness to give is heightened over the holidays. Frequently, financial institution customers supply credit card numbers and checks in the name of goodwill, which are then pilfered by those with bad intentions. Together, AML and client managers should encourage customers to pause and do the research on a secure website before making a donation. Last but not least, consider endorsing payment with a credit card and not a debit card as to avoid a compromise of ones’ bank account funds. Preventative measures can avoid leaving a customer out in the cold.
While schemes happen every day, it seems more plausible over the most wonderful time of the year. Customers fall victim to false allegations of a loved one’s arrest or the end-of-the-year-owed taxes that can only be satiated with the provision of gift card numbers to large retail companies. The fear and concern over the sake of oneself or their loved one overshadows the gut instinct that gift cards are not a legitimate form of payment. “The elderly are especially vulnerable to scams where criminals claim to be troubled relatives, with those over 60 years old accounting for 37 percent of this type of fraud.”1 Whether the call be purportedly from the IRS or a law enforcement agency, remind customers to contact the troubled family member or utilize a genuine phone number for the law enforcement agency. A brief, confirmable conversation can spare an individual a tremendous loss. The AML industry should remain steadfast in reviewing abnormal customer behavior and excessive gift-card purchases.
Retail/business clients are patron-centric and the holiday season is no exception. Increased sales can bring an increase in returns of fraudulent items. From stolen merchandise, used merchandise, counterfeit merchandise, use of fictitious receipts and more, retailers may have their bank accounts temporarily in the black but fraudulent returns can place them in in the red. In 2016, the National Retail Federation estimated “…return fraud could cost retailers nearly $4 billion during this holiday season, higher than last year’s lost profits. Over the entire year, retailers could lose up to $16 billion.”2 Have client managers propose the following measures to business customers that can be implemented to minimize loss over the holidays:
- Enforcing a strict return policy time frame
- Requiring original receipts
- Returning the charge back to the original credit card
By working with the customer to promote deterrence, AML officers can focus on denoting excessive withdrawals from bank accounts.
Regardless of the season or celebratory event, trust but verify is an applicable idiom year round. A few small, precautionary steps taken by the individual or business customer can act as a financial loss deterrent. With client managers promoting preclusion, AML officers can spout holiday greetings while remaining vigilant and protecting clients from holiday cheating.
- Aimee Picchi,“Beware of a new scam involving “relatives” and gift cards,” CBS Moneywatch, April 20, 2017, https://www.cbsnews.com/news/beware-of-a-new-scam-involving-relatives-and-gift-cards/
- Kara Driscoll, “With fraud on the rise, retailers tighten up return policies,” Dayton Daily News, December 28, 2016, https://www.daytondailynews.com/business/with-fraud-the-rise-retailers-tighten-return-policies/cVu5gdWhXTca5ia23GJTQO/