Financial institutions need to be on guard against the laundering of money obtained through so-called romance scams, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) warns.
The federal anti-money laundering agency issued an operational alert on Thursday that aims to highlight the threat of money laundering involving the proceeds of romance fraud.
According to the bulletin, romance scams generate some of the largest losses from mass marketing frauds in Canada, but they are also some of least reported frauds, either because victims are often ashamed of being duped, or are unwilling to accept that they have been victimized.
“Reporting entities—front-line employees, in particular—must be aware of contextual factors that both suggest clients are victims of romance fraud and might not be apparent from reviewing transactions alone,” the bulletin said.
The alert includes guidance for financial firms to help identify both possible victims and perpetrators of romance frauds.
“Romance fraud generally involves victims carrying out transactions that do not fit their profile, including sending funds directly to individuals to whom they have no apparent connection. This type of fraud may also feature sudden increases in wires/email money transfers,” it said.
The alert said firms should be aware of customers executing transactions at the direction of others and customers who do not have the expected information about transactions. It also noted that victims may give perpetrators direct access to their bank accounts.