2024-11-08 15:11:00
The increasing digitalization of the financial sector has significantly increased the risk of sophisticated fraud, affecting both individuals and institutions, one of the most worrying being the phenomenon of orange accounts. According to the Nasdaq Verafin Global Financial Crime Report 202447% of professionals who work to combat financial crimes consider the activity of so-called “oranges” as one of the main threats to the financial system. In Brazil, data released last year by Serasa Experian pointed out that more than 1.6 million consumers could be considered “orange”, and that the modality generated losses of R$2.5 billion to the sector in 2022.
An “orange” is someone who facilitates money laundering by moving illicit funds through their bank account. This can happen consciously, when there is deliberate collaboration with a criminal network, or unconsciously, when one is induced to lend the account to criminals or even in the case of third parties taking control of the account without consent.
According to Rogério Freitas, from Lynx Tech, to detect and prevent fraud and financial crimes, students and young people are especially vulnerable to this type of attack, as criminals often offer easy money in exchange for their bank details. Fraudsters can also offer seemingly legitimate or remote jobs for international remittances, turning them into “scammers” without them understanding the serious consequences, which can range from financial exclusion to imprisonment.
“Orange accounts are a critical link in money laundering and pose a significant risk to financial institutions and their customers. Many criminals take advantage of financial or personal situations to convince people to use their bank accounts to launder money in exchange for rewards. In contexts like Latin America, where this type of offers can be very attractive to make money easily and quickly, customer education and awareness are essential to prevent this type of increasingly common crimes”, says Rogério Freitas, director- general of Lynx Tech in Brazil.
To combat orange accounts, Lynx Tech has developed six recommendations to avoid becoming the holder of an orange account:
1 – Protect personal data: it is important to make sure that personal and financial information is safe, in addition to not sharing it online or with strangers. Cybercriminals can use compromised data to create fake identities and open accounts in third-party names.
2 – Be wary of suspicious offers: you need to be careful to avoid accepting proposals that request the use of your bank account to transfer money to third parties, especially if they offer unclear or excessively attractive rewards.
3 – Monitor bank accounts regularly: frequently analyzing account statements and transactions for any unusual or unauthorized activity that may indicate account compromise is essential.
4 – Use multi-factor authentication: protecting bank accounts with multi-factor authentication makes unauthorized access difficult and protects data against possible fraud.
5 – Report suspicious activities: in case of any suspicion of illicit activity, it is necessary to immediately report it to the bank involved and the competent authorities.
6 – Verify requests: before making any transaction on behalf of another person, it is worth checking whether the request originates from a reliable source. Contacting the requesting entity directly can confirm the authenticity of the request.
“To face the threat of orange accounts, financial institutions must implement real-time fraud prevention and monitoring strategies that increase the security of their users. Rigorous identity verification, tracking money flows across accounts, and collaboration between cybersecurity, fraud, AML, and KYC teams are essential to effectively identify and prevent suspicious activity. Furthermore, sharing intelligence with other institutions and authorities reinforces collective defenses”, concludes Rogério Freitas.
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**Interview with Rogério Freitas, Director-General of Lynx Tech**
*Date: November 8, 2024*
**Editor:** Thank you for joining us today, Rogério. With the rise in digital fraud and the phenomenon of “orange accounts,” can you explain to our audience what an orange account is and why it poses such a significant risk to the financial system?
**Rogério Freitas:** Thank you for having me. An “orange account” refers to a bank account that is used to facilitate money laundering, often unwittingly, by individuals who either consciously collaborate with criminals or are manipulated into lending their accounts. Since these accounts can be exploited without the account holder’s awareness, they represent a substantial threat to both financial institutions and their customers. Criminals often target vulnerable individuals, such as students, by offering quick financial rewards, which can lead to serious legal consequences for the individuals involved.
**Editor:** Recent statistics indicate that over 1.6 million Brazilians may fall into the category of orange account holders, resulting in substantial financial losses for the sector. What strategies do you believe can be implemented to reduce these numbers?
**Rogério Freitas:** It’s crucial to implement educational programs that raise awareness about the risks associated with sharing personal banking information. Our team at Lynx Tech has put together six recommendations to help individuals avoid unwittingly becoming orange account holders. These include securing personal data, being wary of unsolicited job offers, and understanding the implications of sharing their bank details. Education and awareness are key to preventing these crimes, particularly in regions where the allure of easy money is significant.
**Editor:** You mention the importance of customer education. What specific measures can individuals take to safeguard their accounts from being exploited?
**Rogério Freitas:** First and foremost, protecting personal data is essential. Individuals should refrain from sharing sensitive information online or with strangers. Additionally, they should be cautious about any offers that seem too good to be true, such as easy jobs or high payouts for little effort. It’s also advisable to regularly monitor bank accounts for any unauthorized or suspicious activity.
**Editor:** Thank you, Rogério, for these insights. As digitalization continues to grow, this issue surely requires ongoing vigilance. What role do you see technology playing in combating these risks?
**Rogério Freitas:** Technology plays a pivotal role in both detecting and preventing fraud. Advanced analytics and machine learning can help identify suspicious activities in real-time, enabling financial institutions to take swift action. Moreover, leveraging educational tools and resources can empower customers to protect themselves. A collaborative effort between tech companies, financial institutions, and the public is essential in combating the rising tide of financial crime.
**Editor:** Thank you for your time, Rogério. It’s clear that combating fraud through awareness and technology will be vital in securing our financial future.
