Human Trafficking, Law Enforcement, and Financial Institutions: An Informative Blog Series, Part 3 of 3

Written by Daniel Lane, CFE, on behalf of the Anti-Human Trafficking Intelligence Initiative (ATII)

Part 3 of a 3 Part #FollowMoneyFightSlavery Blog Series

Other Ways Financial Institutions Can Assist Victims

Introduction

According to The Polaris Project, an organization focused on confronting and ending sex and labor trafficking in North America, there were a total of 10,949 cases of human trafficking reported to the U.S. National Human Trafficking Hotline in 2018.[1] This represents a 25% increase from 2017. Since launching the hotline in 2007, Polaris has handled nearly 57,000 total cases.[2] The issue of human trafficking is becoming more visible and a multitude of national and international agencies are increasing efforts to end these heinous crimes.

In Part 2 of this series, Tracing the Traffickers: Banking Red Flags, the open communication financial institutions and law enforcement must have in order to detect and ultimately apprehend traffickers was discussed, along with the typical red flags and typologies Anti-Money Laundering (AML) transaction monitoring systems should be calibrated for in order to detect possible human trafficking. In addition, there are several other key roles banks, money transmitters, and credit unions play in the fight against human trafficking that are outside the AML and Fraud capacities. These functions include training front line staff in how to identify and report suspicious customer activity in a retail setting and providing victims the banking services required to facilitate a safe and financially sound life.

Customer Service Staff

Training

An often overlooked role at a bank in terms of compliance, the customer service representatives or tellers are key front line employees in the fight against trafficking. In many cases, victims are instructed to use wire transfers to send money to their recruiters based in their home countries (i.e. Mexico) or in another part of the United States.[3] There have been situations in which recovered victims have stated that they had wished retail banking staff would have noticed the large amounts of cash they had brought for deposit, the wire transfer requests they had submitted, or the individuals escorting them, in hopes of being rescued earlier.

“He was never linked [to] or involved with [the bank accounts]. He would just sit at the bank with me…[and] make sure that I was not telling anyone anything.” [4]

Customer Red Flags

In an Advisory issued in 2014, the United State Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) disseminated useful guidance in identifying and reporting financial transactions connected to human trafficking and smuggling. The Customer Interaction red flags issued by FinCEN include the following: [5]

A customer establishes an account or visits a branch to conduct transactions while always escorted by a third party.
Common signer(s)/custodian(s) in apparently unrelated business and/or personal accounts. Similarly, common information used to open multiple accounts in different names.
Unexplained/unjustified lifestyle incommensurate with employment or business line. Profits/deposits significantly greater than that of peers in similar professions/business lines.
Accounts of foreign workers or students where the employer or employment agency serves as a custodian.
Customers with an excessive number of accounts.

Staff should be trained on the red flags and made aware of the proper procedures they ought to follow in order to report suspicious activity. Local law enforcement agencies may serve as a great resource that can provide specialized training for banking staff on localized criminal activity.[3]The relationship between banks and law enforcement is especially critical in areas with a higher risk of human trafficking such as Los Angeles, New York City, Miami and areas along the Mexico/United States border.

The Polaris Project also suggests that the National Human Trafficking Hotline number is posted and made available to at-risk customers. The could be provided on receipts, in mobile/online portals or in separate brochures.[4]

Victim Assistance

If financial institutions and law enforcement agencies communicate and collaborate their efforts and can identify, disrupt and apprehend human trafficking operations, their victims will need assistance in getting their lives back. In many cases, victims either have ruined credit, or no credit at all and they also lack recorded employment history. Due to these issues, many cannot successfully open bank accounts. Many banking institutions offer “second chance” accounts that are accessible for people with low credit scores or other adverse circumstances and trafficking victims can take advantage of these offerings.³

In some cases, checking, saving, and loan accounts are opened by the victims and their traffickers are listed as co-signors, often under aliases, and if a victim escapes their captor(s) all debts will default to the victim who often cannot re-pay the debts or figure out how to handle the accounts. If a trafficker makes purchases to commercial sex or escort websites using a victim’s account, a bank may block the victim from further business.

“Everything was put in my name with [my trafficker] as a co-signor, since [my trafficker] used a fake name, when I escaped, everything faulted back on me.”^[4]

“I can’t even get a [pre-paid credit card]! I can’t get anything. I’m banned! Last year I went to try and get a [pre-paid card] and I put $300 on there. [The credit card company] took the money, but then they were like, “Oh, there’s a problem with the card.” So, when I called the card [company], they said, “you’re basically 86’d from our services because of advertisements on Backpage.com” That’s embarrassing!”^[4]

The Polaris Project is also a large supporter of establishing relationships with local anti-trafficking service providers, that include providing credit building loans, financial literacy counseling and having service providers conduct training(s) to bank staff.

Conclusion

Banking institutions must not only focus on the transaction monitoring and FinCEN suspicious activity reporting requirements when it comes to human trafficking, but they must not lose focus on the HUMAN side of these awful crimes. The ultimate goal of law enforcement agencies and organizations such as the Anti-Human Trafficking Intelligence Initiative, is to bring victims safely home. Banks are in a very unique position to assist in multiple ways, including communicating with law enforcement, training their retail customer service staff on what to look for when identifying possible trafficking operations, and offering victims financial services in order to facilitate a healthy, and stable lifestyle once freed from their traffickers. Without a solid financial foundation, safe housing and stable employment, the chances of re-exploitation and risk to safety increase dramatically. Banks are finding themselves battling on several fronts, but the war against human trafficking is one worth fighting.