By Beting Laygo Dolor, Contributing Editor
Suspicious transaction reports (STRs) for the first eight months of 2020 were 57 percent higher compared to the same period last year, Bangko Sentral ng Pilipinas (BSP, the country’s central banking authority) Gov. Benjamin Diokno said recently.
STRs are filed by banks and other financial institutions whenever there are transactions suspected to be engaged in money laundering or fraud.
Diokno also heads the Anti-Money Laundering Council (AMLC), which issued a statement expressing concern at the surge of questionable transactions totaling PHP3.1 billion (about US$64.6 million). One reason cited was the shift to digital banking by consumers due to the restrictions imposed by the government due to the coronavirus pandemic.
Tied to this shift was the rise in phishing schemes and higher payments related to child pornography, according to the BSP chief.
He said an AMLC study found the number of STRs rising dramatically from January to August but of the total number “only 29 percent occurred during the lockdown.”
An example of a suspicious transaction is when a savings or current account suddenly surges with a PHP500,000 (US$10,400) transaction, raising red flags, especially when the account rarely reaches this level.
Other cases involve online money lending by companies not authorized to engage in the activity. The BSP recently reported three such cases to the Securities and Exchange Commission, which then ordered the trio to cease and desist from operating until they received BSP authorization.
Phishing occurs when fake lenders ask for credit card numbers and bank account details of would-be borrowers, which are then billed for non-existent transactions.
The recent spate of natural calamities striking the Philippines has also been a source of fraudulent transactions, with suspicious organizations or individuals soliciting donations that never reach intended recipients.
The AMLC study found a rising trend wherein fraudsters pretend to be affiliated with the government in order to request for donations related to the Covid-19 pandemic. Other online marketing fraud schemes involve the use of Bitcoin, which majority of Filipinos do not fully understand.
Said Diokno: “Electronic money issuers, money service businesses, and other online fund transfer service providers are advised to be vigilant amid a surge in STRs related to online activities.”
AMLC data showed that almost half of the STR filings during the eight-month period were related to skimming and phishing. Total estimated value was pegged at PHP2.7 billion (US$56.250 million).
Other figures state that 13 percent of STRs were transactions involving online sexual exploitation of minors, with an estimated value of PHP84.5 million (US$1.76 million).
Meanwhile, transactions involving money “mules” or pass-through account accounted for nine percent of STRs for the period, according to the AMLC.
The BSP chief said, “AMLC underscores the need for covered persons to remain cautious as money launderers and other criminals may be abusing digital platforms, which have been largely adopted due to the pandemic.”
Filipino consumers have been left with little choice except to resort to online banking, especially at the height of the lockdown when moving around was extremely limited and most banks only operating on a skeletal force and with far fewer branches open.
STRs tied to electronic banking transactions skyrocketed by 1,680 percent for inward fund transfers, and by 5,158 percent for outward fund transfers.
Cash-in and cash-out transactions through electronic cash cards which were filed as STRs likewise jumped dramatically by 580 percent and 197 percent, respectively.
Outside the banking industry, STRs submitted by electronic money issuers such as pawnshops and money service businesses rose by 688 percent and 51 percent, respectively.