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AML human trafficking red flags and other ways banks can support victims

Kate Randazzo
January 17, 2024
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Human trafficking red flags, strategies, and support

Human trafficking is more prevalent than most realize, and banks and credit unions can help prevent it. Know the red flags to watch for.

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Introduction

The fight against human trafficking and your AML program

A key mission of FIs is to support the local businesses, organizations, and the causes that make their communities better. One issue that hurts people and communities everywhere is human trafficking, and January is Human Trafficking Awareness Month. It's a great time to remember how financial institutions, and especially their AML/CFT staffs, are uniquely positioned to help combat this enormous human rights issue. Knowing the red flags of human trafficking and supporting anti-trafficking organizations are two ways FIs can fight this crime and impact their communities." 

According to the Financial Crimes Enforcement Network, human trafficking is one of the most profitable forms of international crime, generating an estimated $150 billion a year globally. FinCEN data shows that human trafficking in the United States takes place in a wide variety of industries—hospitality, agriculture, janitorial services, construction, restaurants, domestic work, and so on. The United Nations estimates there are currently 40 million people enslaved around the world, and that one-quarter of them are children. The issue is more prevalent than most of us realize, despite it making headlines this year.  

Banks can help identify and combat financial crimes by recognizing financial warning signs and training front-line staff on human trafficking red flags. But community financial institutions can also help prevent crime by partnering with anti-human trafficking organizations that help vulnerable populations get back on their feet. Two recent guests of the Abrigo podcast Ahead of the Curve shared ways that their organizations, Made Free and the Texas Advocacy Project (TAP), fight against human trafficking. Read on for insights from Brad Jeffery, founder of Made Free, and Heather Bellino, CEO at TAP. They offered practical ways to detect human trafficking transactions in your branch and considerations for impacting your community by partnering with anti-human trafficking organizations. 

Prevention and detection

AML red flags for human trafficking

For financial crime professionals, it can be challenging to track, detect, and report human trafficking based on financial transactions. Compared to drug money or arms dealing money, the transactions involved in human trafficking are typically much smaller dollar amounts that are easier to slip under the radar. Yet these funds add up to a billion-dollar industry.  

But there are numerous red flags AML professionals can spot to help identify human trafficking. “Notice patterns such as movement from one place to another in different large cities or a larger than usual number of smaller CashApp or Only Fans transactions. Look into wires to and from foreign countries more skeptically,” said Terri Luttrell, Director of Compliance and Engagement at Abrigo. “A lot of little signs can add up to a darker, bigger picture.” 

Perhaps more effective than examining every transaction to ensure it comes from a legitimate business is to lean into a practice that most financial institutions already embrace—becoming a trusted community establishment. Understanding local markets and the individuals your bank serves is key to knowing your customers and ultimately being able to tell when something isn’t right.  

“Tellers are frontline workers in the movement to end human trafficking,” said Bellino. “People who are being trafficked often don’t have access to their own ID. They are being manipulated and controlled, and that extends to their finances.”  

Because of their unique roles, tellers are in an excellent position to spot signs of human trafficking. Tellers might be the first person to notice a power dynamic between victim and trafficker because of the nature of their duties. Perhaps a couple comes in to open a bank account or a line of credit in a woman’s name, but her partner controls and hands over all her personal documents. Perhaps one partner does all the talking, or the teller notices other signs of power being exerted over another person. According to the National Human Trafficking Hotline, working in the financial industry provides you the opportunity to report suspicious behavior involving 92% of the various types of human trafficking. If you observe transactions that just don’t feel right, don’t hesitate to file Suspicious Activity Reports (SARs) and call the National Human Trafficking hotline at 888-373-7888.  

Helping hands

Anti-human trafficking organizations and what you can do to help

One of the most significant barriers to leaving an abusive situation and escaping trafficking is financial stability. This is especially true for victims who have children or others who depend on them. Banks can offer hope to victims of human trafficking in a variety of ways. Second-chance banking accounts for community members who may not have stellar credit are becoming common practice. Consider creating “clean slate” banking products and services so that survivors of human trafficking can present details on their victimization and have a chance to open a bank account, purchase homes, and participate freely in society without shame.  

Supporting organizations that help rehabilitate victims of trafficking is another way banks can make a difference. Policies that promote the employment of former trafficking victims can help end cycles of trafficking, as well. The Texas Advocacy Project provides legal services and financial literacy courses for victims who need help achieving financial security. TAP also lobbies for municipal policies that reduce physical and emotional stressors that can lead victims into trafficking scenarios, such as livable wages. 

Other anti-human trafficking organizations help prevent crime in the first place by bringing jobs and a sense of community to areas where trafficking is prevalent. Poverty and the lack of well-paying jobs are the key drivers of people being trafficked, so supporting these jobs for the most vulnerable is hugely impactful. Made Free provides ethical, well-paying jobs in the fashion industry to reduce drivers of trafficking worldwide. Its workers create handmade branded items for businesses that want to do social good and support environmental and human sustainability practices with their swag purchases.  

“If you want to improve the performance of your team and recruitment and retention, the most impactful thing you can do is engage your employees in something bigger than themselves,” said Jeffery.  

This National Human Trafficking Awareness Month, consider supporting a nonprofit organization fighting human trafficking, or supporting businesses like Made Free that prevent human trafficking with ethical manufacturing and hiring practices.  

Identify human trafficking behavioral indicators with this checklist: "Human Trafficking Red Flags."

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About the Author

Kate Randazzo

Content Marketing Manager
Kate Randazzo is a Content Marketing Manager at Abrigo, where she works with industry thought leaders to create digital content that helps financial institutions better serve their customers. Before joining Abrigo, Kate managed social media and produced articles for Campbell University’s quarterly magazine and other university content initiatives. She earned

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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