Credit union employees can play key roles in detecting human trafficking


Armed with a unique understanding of their members and financial trends, credit union employees are in a position to play a vital role in the fight against human trafficking.

“Credit union staff can a play key roles in identifying and reporting transactions that could possibly be related to human trafficking, based on their interactions with members and general awareness of banking habits,” said Linda Bow, director of compliance at the New York Credit Union Association. “A victim’s interaction with a frontline credit union employee may be the only communication that individual has with anyone besides his or her captor.”

Human trafficking is big business, generating estimates of $150 billion per year in the United States, according to the International Labour Organization. This means that credit unions in New York state, across the country and around the world could unknowingly be handling transactions for human trafficking victims or their captors.

The United Nations estimates there are between 27 million and 30 million victims of modern slavery and human trafficking in the world. According to Polaris, the nonprofit organization that operates the National Human Trafficking Hotline, New York state reported 200 cases of human trafficking in 2019, which was down from 492 the previous year.

But statistics likely do not paint an accurate picture of the number of individuals who are victims of human trafficking, which involves the use of force, fraud or coercion to compel a person into commercial sex acts, labor or services against his or her will.

Data from hotline calls indicate that victims are often isolated by their captors and there may be nothing visible to indicate a person is a victim of human trafficking. “That may come as a surprise — especially if you have seen posters or been to trainings that offer ‘indicators’ of trafficking, such as a person looking disheveled, upset or scared,” the Polaris website states.

And with money the driving force behind human trafficking, employees at financial institutions, including credit unions, are well-positioned to identify potential signs of human trafficking — if they know what to look for.

To assist in the fight against human trafficking, FinCEN, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network, recently included a box on its suspicious activity report related to human trafficking and have issued past advisories that provide common terms that may be used on the SAR when reporting this activity, Bow said.

The advisories provide information on how financial institution employees can detect and report suspicious financial activity that could be related to human trafficking, including identifying:

  • deposits through funnel accounts with immediate withdrawals from different geographic locations;
  • frequent ATM or credit-card transactions in even amounts between 10 p.m. and 6 a.m.;
  • sudden activity changes in business accounts outside normal patterns;
  • structured cash deposits at multiple branch locations;
  • unusual, unrelated wire activity with no apparent relation to the member;
  • frequent exchange of bills for larger denominations when it is not the typical activity of the account; or
  • transactions conducted by individuals escorted by a third party.

FinCEN also noted that, although some similarities with legitimate financial activities may exist, financial institutions should evaluate indicators of potential human smuggling or trafficking activity in combination with other red flags and factors, such as expected transaction activity, before making determinations of suspiciousness. “No one transaction or red flag by itself is a clear indicator of human smuggling or trafficking,” the advisory stated.

FinCEN’s full advisory to financial institutions on recognizing activity that may be associated with human trafficking can be accessed on the U.S. Treasury’s website.


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