In a recent interview with Love Never Fails Us, a non-profit working with human trafficking survivors, CEO Vanessa Russell stated, “People are feeling isolated and lonely during the pandemic. They are turning to the digital world to make new friends and explore new activities. Unfortunately, innocent apps and ideas have been infiltrated by criminals looking to prey on vulnerable people, especially children. It starts by chatting with a friend, escalates quickly into sexting and sharing "nudes" and moves on to videos that children are coerced into sharing in exchange for friendship. These porn videos are then uploaded to places like porn hub where anywhere from 100 thousand to 115 million people watch them on a daily basis.” One survivor is quoted as saying, “I was raped at 14, and the video ended up on a porn site”. According to BBC News, that video was viewed 400 thousand times.
The Financial Crimes Enforcement Network (FinCEN) issued an advisory on human trafficking (FIN-2020-A008) in October 2020 supplementing their 2014 guidance on Recognizing Activity that May be Associated with Human Smuggling and Human Trafficking- Financial Red Flags. The most recent advisory emphasizes that the global COVID-19 pandemic may exacerbate the conditions that contribute to human trafficking, as the support structures for potential victims collapse, and traffickers target those most impacted and vulnerable. In collaboration with law enforcement, FinCEN identified 20 new financial and behavioral indicators of labor and sex trafficking and four additional typologies.
The financial indicators are particularly important for the financial services sector to assist in detecting and reporting possible human trafficking. These transactional red flags include the following:
- Frequently movement through, and transact from, different geographic locations in the United States - transactions can be combined with travel and transactions in and to foreign countries known for human trafficking
- Inconsistent transactions with a customer’s expected activity and/or line of business in an effort to cover trafficking victims’ living costs, including housing, transportation, medical expenses, clothing, grocery stores, and restaurants, especially fast-food eateries
- Transactional activity largely occurs outside of normal business operating hours, is almost always made in cash, and deposits are larger than what is expected for the business
- Frequent cash deposits with no Automated Clearing House (ACH) payments
- Frequent purchases and use of prepaid access cards
- Account shares common identifiers, such as a telephone number, email, and social media handle, or address, associated with escort agency websites and commercial sex advertisements
- Frequent transactions with online classified sites that are based in foreign jurisdictions
- Frequently sends or receives funds via cryptocurrency to or from darknet markets or services known to be associated with illicit activity
- Frequent transactions using third-party payment processors that conceal the originators and/ or beneficiaries of the transactions
- Transactions that avoid identification document requirements or that trigger reporting
While human trafficking typologies are sometimes difficult for financial institutions to detect, it is possible. The dollar amounts may be lower than usual transaction monitoring thresholds, so you might consider lowering certain parameters, such as velocity and cash scenarios, to catch these lower transactional patterns. When filing suspicious activity reports (SARs) for suspected human trafficking, FinCEN asks that you add all pertinent information in the SAR narrative, particularly why you believe it might be human trafficking. A potential victim’s name should not be added as a subject of the SAR, but if known, should be added in the narrative. In addition, FinCEN requests that you use the key term “Human Trafficking FIN-2020-A008 in SAR field 2 (Filing Institution Note to FinCEN) as well as selecting the human trafficking box in SAR Field 38(h). In addition to filing a SAR on suspected activity, the Department of Homeland Security should be notified at their Tip Line 1-866-347-2423.
