Over recent years, educational institutions are becoming attractive targets for cybercriminals and money launderers. The University of California in San Francisco paid $1.14 million as ransom to criminals to stop them from publishing sensitive information on the internet. Moreover, this not only threatens the security of students but also drives educational institutions to lose billions. Similarly, criminals target these institutions to escape anti money laundering regulatory checks and launder big sums of funds.
In order to provide a secure learning environment while preventing exploitation by criminals, the education sector requires AML security solutions. They can also identify risk-possessed entities, especially the ones making donations. This blog further provides details regarding financial crimes in the education sector and how AML solutions provide protection against it.
AML Verification Services – Types of Fraud in the Education Sector
Since the COVID pandemic took over, the landscape of educational institutions has completely transformed. With availability of online learning portals such as Lynda, Coursera, and Udemy, e-education has become a lot easier. As technological transformations are changing the ways this sector functions, chances of crimes are also increasing. Criminals are using well-known or obscure educational institutions to move their ill-gotten funds in form of donations and scholarships.
Due to lax AML compliance checks, fraudsters steer clear of the regulatory inspection. Therefore, criminals pour adverse impacts on the educational sector along with high chances of penalties. Therefore, the education sector requires robust AML screening solutions to mitigate the chances of financial crimes and provide a secure environment for a better learning process. Despite the identification checks in place, institutions are still vulnerable to facing the following types of fraud;
Phishing Attacks
In case of foreign students, it becomes more challenging for educational institutions to detect whether they are legit entities or mere fraudsters. Moreover, criminals are waiting for them to pitch them through phishing attacks. This way they pose as banks, insurance firms, or other financial companies and reap confidential information. This later helps them launder their money through the education sector.
Therefore, educational ignitions require robust AML compliance programs to ensure they are not giving admission to risk-possessed entities. Similarly, digital onboarding solutions further help identify students and validate their information by deploying active screening as well as cross-checking within global databases.
Accommodation Scams
This is another prevalent type of fraud. Criminals advertise a property, house, or other such accommodation places which they do not own. Furthermore, they take rents in advance from students without allowing them to visit the facility. Criminals make fake promises such as sending keys through couriers or transferring ownership upon arrival. This way, fraudsters easily commit financial crimes and flee with money from students.
Therefore, educational institutions require robust AML solutions to ensure the students reach accommodation facilities that are best suitable for them. Similarly, universities, schools, or colleges providing designated space to students also require anti-money laundering solutions to make sure no criminal is using their name upfront to reap millions.
Fraudulent Donations
Donations are the catalysts for ensuring better education for the privileged or every other type of student. However, criminals see this process as their free ticket to launder money. They offer billions in donations to institutions with lax AML security checks and in return steer clear of the legal restrictions. Moreover, absence of anti-money laundering scrutinies such as critical due diligence, risk assessment, and suspicious detection, the education sector becomes more vulnerable to financial crimes.
For effective prevention of criminal activities, the education sector requires robust AML compliance programs. This way, they can ensure that persons or organizations making donations do not fall on any sanctions or blacklists. Moreover, online anti-money laundering solutions enable educational institutions to access global watchlists for active screening of entities.
Fee Submission Rackets
In order to reap illicit financial benefits, criminals also pose as legit government agencies. They then ask the students to make advance payments for international students. Furthermore, fraudsters create fake websites as well as emails to make their agency look original. Ultimately, they easily dodge the AML compliance checks while exposing students to millions in losses.
Therefore, governments require AML systems to identify fraudulent entities using their name and combat malicious intentions. Hence, they can safeguard payments while helping the education sector to provide secure gateways for transferring fees.
In Summation
In a nutshell, the education sector is increasingly facing a rise in financial crimes mainly due to shifts governed by the COVID pandemic. Lack of AML monitoring and lax combatting measures are other factors adding to this downfall. Therefore, educational institutions need to build efficient anti-money laundering programs while on their run to onboard global students. Moreover, the AML compliance online solution helps safeguard operations against criminal attempts such as payment fraud, donation scams, fake loans, and other suspicious activities.
