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Jamaica Money Remitters Association

Assessing the Impact of the Lottery Scam on the Remittance Sector Lottery Scam Forum

Terra Nova All Suites Hotel November 7, 2012

+Overview

Remittance businesses targeted because of quick and convenient services

Scams have resulted in suspension of services at

a number of locations over the past two years. Most recent in August

2012.

+Horizontal Growth of Lottery Scam

Scammers now routing funds

through postal and courier services

Victims purchase and ship electronics & appliances which

are then sold by scammers for cash

+Impact on Jamaica’s Reputation

Efforts to eradicate the scam need strengthening

Scam makes Jamaica unattractive to Diaspora and potential international investors

Tourism threatened by violent crimes directly linked to scam

+What the JMRA is Doing

Supports national initiatives to fight the lottery scam

Facilitates dialogue with members & key

stakeholders; creates an

environment where strategies are shared

Lobby for implementation of

legislation

Press for stronger systems to detect

fraud

+Impact on Remittance Companies

Increased expenditure on human resources and technology to improve

scrutiny of transfers

Continual, costly compliance/operations procedure adjustments which result in delays

for customers

Stricter compliance procedures compromise customer service

+Impact on Remittance Companies cont’d

Stricter compliance measures anger customers and scammers who sometimes respond violently to frontline employees

Increased costs to protect employees and property and to provide counselling

Increased overall costs on security, compliance, human resource affect bottom line

INCREASED COSTS

+Impact on Remittance Companies cont’d

Reduced profits- which may discourage operators and result in businesses winding up operations

Exposes remittance agencies to hefty fines.

Closure of remittance outlets could worsen the impact on other businesses, reduce competition from which customers benefit, and lead to the re-emergence of informal markets

REDUCED PROFITS

+Social Dependence on Remittance CompaniesQuick, safe and convenient access to money transfers

Three out four people use money transfer agents only

Some 34 percent of adults do not have bank accounts

Remittance used to purchase food; access healthcare; pay utility bills; finance education

Source: BOJ 2010 survey on Remittances to

Jamaica

Money Transfer Methods Used

+Where Do We Go From Here?

Fast track legislation,

particularly the implementation of the Evidence Act to facilitate

victims’ testimony by

video

Make the lottery scam/ advance fee payments a crime with its

own consequences

under law

Implement an Integrated

identification verification

system

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The End