More Grim News from the Pandemic - WST

According to a recent release from FinCEN, there has been a 147 percent increase in online child sexual exploitation (OCSE) between 2017 and 2020, including a 17 percent increase year-over-year in 2020. These grim statistics are one of the reasons FinCEN released FIN-2021-NTC3 on September 16, 2021. The Notice not only highlights some financial trends related to OCSE, but also provides financial institutions with specific suspicious activity report filing (SAR) instructions.

Studies by the FBI cite the increase in this disturbing activity is likely related to three factors:

1. Increase internet usage by children who are spending more time online,
2. Restricted travel during the pandemic resulting in more sex offenders being online, and
3. Increased access to and use of technology, including encrypted communications, bulk data transfers, cloud storage, live-streaming, and anonymized transactions

The FinCEN guidance also indicates that OCSE offenders are using convertible virtual currency (CVC), peer-to-peer mobile applications, the darknet, and anonymization and encryption service to try to avoid detection. These offenders also attempt to conceal their activities by transferring funds via third-party payment processors.

If your financial institution suspects any OCSE has occurred or was attempted through an account at your institution, a SAR should be filed following the instructions outlined in this guidance. Additionally, if you have immediate information to share with law enforcement, please contact the National Center for Missing and Exploited Children at 1-800-843-5678.

https://www.fincen.gov/sites/default/files/shared/FinCEN%20OCSE%20Notice%20508C.pdf

Authored by: Joann Lang, CIA, CAMS, CCBP