Article: Fraud, money laundering and the COVID-19 Pandemic

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Fraud, money laundering and the COVID-19 Pandemic

Tracy Molino, Anthony Scalia, 19 May 2021

As discussed in our four-part series, the COVID-19 pandemic has accelerated a trend away from using cash and other “touch-based” payment methods. This acceleration has been coupled with an increase in digital and contactless payment methods. The ongoing lockdown measures and stay-at-home orders have directly impacted consumer habits, resulting in consumers conducting their shopping online and away from retail stores, ordering their meals via delivery apps instead of dining in restaurants, and banking online as opposed to stopping by the teller on their commute home from work.

While the continued shift toward digital and contactless payments has been a driving force behind economic recovery, it is not without its risks for consumers and businesses, potentially creating an online environment ideal for fraudsters and money-launderers. In this insight we examine recent developments in this space in the context of the COVID-19 pandemic.

Canadian trends in money laundering and fraud

Canada’s anti-money laundering (AML) and anti-terrorist financing (ATF) regime is governed by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and administered by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). FINTRAC previously released a special bulletin highlighting trends in money laundering and fraud in Canada just a few months into the pandemic. Although lockdown and physical distancing measures disrupted some traditional money laundering methods, the pandemic created new opportunities for the perpetration of fraud by targeting individuals, businesses and entities with COVID-19-related variants of popular phishing and blackmail scams.

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