The increase in online child sexual exploitation crimes is staggering. In just three short years, financial institutions increased their reports by 147%. And that number is only rising as more children – and criminals – spend time and transfer money online.
To help financial institutions, the Financial Crimes Enforcement Network (FinCEN) has provided suggestions for spotting crimes, tips on filing suspicious activity reports (SAR) and details on online child sexual exploitation crimes trends.
What can financial institutions do to help curb this activity?
Like human trafficking, child exploitation crimes can be hard to identify, especially given the lengths to which the perpetrators will go to conceal their activity.
Financial institutions can play a key role in preventing crimes because we have an opportunity to spot suspicious payment activity, especially in our own back yard. Nearly a third of all web addresses with child exploitation material are hosting in North America with the United States ranking #2 in the world, according to the Internet Watch Foundation.
FinCEN suggests all financial institutions provide training to spot red flag indicators that might look normal to the untrained eye.
The Financial Transactions and Reports Analysis Centre of Canada, known as Fintrac, provided a sample of Red Flag indicators sometimes associated with exploitation, including the following:
- A male who frequently transfers low-value funds to the same female or multiple females in countries of concern over a short time, with no apparent family connection or other reason to do so.
- Purchases at vendors that offer online encryption tools, virtual private network services, software to clear online tracking, or other tools or services for online privacy and anonymity.
- Purchases on webcam or livestreaming platforms, including those for adult entertainment.
- Transactions to reload prepaid credit cards, particularly ones that deal with virtual currencies.
If you have immediate information to share with law enforcement, you should contact the National Center for Missing and Exploited Children’s tip line at 1-800-843-5678. The line is operated in partnership with the FBI, DHS and other law enforcement agencies.
How to report activity on the SAR
FinCEN provided the following instructions for reporting potential online child sexual exploitation crimes (OCSE) activity:
- FinCEN requests that financial institutions reference only this notice in SAR Field 2 (Filing Institution Note to FinCEN) using the keyword “OCSE-FIN-2021-NTC3.” This keyword should also be referenced in the narrative to indicate a connection between the suspicious activity being reported and the activities highlighted in this notice. Financial institutions may highlight additional advisory keywords in the narrative as applicable.
- Financial institutions should also select SAR Field 38(z) (Other) as the associated suspicious activity type to indicate a connection between the suspicious activity reported and OCSE activity and include the term “OCSE” in the text box. The institution should also enter the subject’s internet-based contact with the financial institution, if known, in SAR Field 43 (IP Address and Date).
- If human trafficking or human smuggling is suspected, in addition to OCSE activity, financial institutions should select SAR Field 38(h) (Human Trafficking) or SAR Field 38(g) (Human Smuggling), respectively.
- FinCEN asks that reporting institutions use the Child Sexual Exploitation (CSE) terms and definitions included in the appendix of the notice when describing suspicious activity to assist FinCEN’s analysis of the SARs.
How Wipfli can help
Wipfli’s financial institutions team understands the challenges you face because many of us have worked in financial institutions and can turn that real-world experience into practical solutions for you. Learn more on our web page about our services for financial institutions.