Detecting Human Trafficking During COVID-19

Terri Luttrell, CAMS-Audit
January 29, 2021
Read Time: min

January is Human Trafficking Awareness Month.

The pandemic has fueled many of the risk factors for becoming a target for human traffickers.

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An ongoing problem

January is Human Trafficking Awareness Month

January is National Slavery and Human Trafficking Prevention Month, also referred to as Human Trafficking Awareness Month. Human trafficking, as opposed to human smuggling, involves the use of force, fraud, or coercion. As January 2021 comes to an end, we see the struggle against this horrific crime continuing and awareness must continue throughout the year. Although human trafficking is a dark and uncomfortable topic, is it critical for financial crime professionals to continue to vigilant about detection and reporting.

Human trafficking is an estimated $150 billion enterprise, with approximately 25 million victims enslaved at any one time. This modern-day slavery exploits victims for forced labor, domestic servitude, and the commercial sex trade. Men, women, and children of all ages and socio-economic backgrounds are being enslaved at an alarming rate within the United States, and many of the victims are our own children, neighbors, and community members. Anyone can be a victim.

New trends

COVID-19 Fuels Risk Factors

For the last year, the world has been dealing with the extra ordinary challenges of a global pandemic. While there is beginning to be a light toward the end of the COVID-19 pandemic, it is still top of mind for most of us and will be for at least the first part of 2021.  This raises the question of how human trafficking has been affected by COVID-19. Are their increased vulnerabilities that create the perfect storm for traffickers to benefit from?

The pandemic has fueled many of the risk factors for becoming a target for human traffickers, including:

  • Isolation
  • At home schooling
  • Greater access to the internet
  • Loneliness
  • Joblessness
  • Depression
  • Increased drug and alcohol abuse
Adapting to the COVID-19 environment

Human Trafficking Shifts Online

While common sense tells us that a pandemic might lead to less trafficking in public venues, such as using hotels, airlines, and attending large events for profit, the pandemic has created opportunity for more on-line activity since most adults and children are spending more time online. Vulnerable children and young adults can easily fall prey on-line to persons who “groom” them into victims, which much of the time ironically turns into web trafficking of minors. By law, any person under the age of 18 cannot legally consent to commercial sex acts, so this is automatically classified as human trafficking.         

While there is not enough data at this early date that validates increases in human trafficking caused by the pandemic, many non-profits and law enforcement groups believe it to be the case, particularly targeting children on-line.  The National Center for Missing and Exploited Children (NCMEC) became aware of predators openly discussing the pandemic as an opportunity to entice unsupervised children into producing sexually explicit material. The NCMEC reports a 98.66% increase in online enticement of children reports in 2020 over 2019, and a 63.31 increase in their Cyber Tip-line reports on exploitation of children for the same period.   

Does your financial crime software alert you to potential human trafficking? It should.
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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 FlagsThe 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.  

About the Author

Terri Luttrell, CAMS-Audit

Compliance and Engagement Director
Terri Luttrell is a seasoned AML professional and former director and AML/OFAC officer with over 20 years in the banking industry, working both in medium and large community and commercial banks ranging from $2 billion to $330 billion in asset size.

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