Human trafficking occurs around the world on a daily basis. As a financial institution, you may be wondering how your institution can help those affected and ensure your customers are not victimized.
There are two types of human trafficking within the world: forced labor and sex trafficking. Forced labor involves more employees than sex trafficking, with less wages which results in more profits for the trafficker. Sex trafficking involves multiple victims in which all of the profits are transferred to the trafficker.
Financial institutions can utilize their AML model to monitor customers’ account activity to look for any anomalies commonly associated with human trafficking. Below are listings of transactions that either will or will not appear within the customer’s account history related to human trafficking.
Common expenses or purchases you will not see within the victim’s bank account although these generally flow through personal accounts:
- Grocery store purchases on a consistent basis
- Monthly mortgage/rent payments
- Housewares, furniture and/or décor purchases
- Purchases related to hobbies
- Regular hair appointments
- Regular dentist appointments (usually twice a year)
- Any activity that shows the individual “has a life”
Common expenses or purchases you will see within the victim’s bank account which are “inconsistent” with normal personal accounts:
- Frequent hotel/motel expenses
- Payments for advertisements online (i.e. backpage.com and other adult websites)
- Frequent fast food purchases
- Frequent gas station stops (located in different areas)
- Nail salon, tanning salon, adult lingerie and drug store purchases (usually found in the trafficker’s account)
- Western Union money orders
- Purchases that are spread-out throughout an area, showing the customer does not spend much time in one localized area
- Multiple cell phone bills charges
In addition to utilizing your AML model where possible, providing training on red flags to your frontline is key and may be the most effective way to identify suspicious activity – much like elder financial exploitation, your frontline or branch employees are strongly positioned to identify potential signs of human trafficking.
A combination of effective automated monitoring and honed human instinct may position your institution to be the first line of defense or detection in the ongoing effort to combat human trafficking.
For additional information email the author at firstname.lastname@example.org.