The Australian Transaction Reports and Analysis Centre (AUSTRAC) announced that it has warned online payment providers over recent suspicions of payments for child sexual exploitation. The body has therefore asked payment companies to tighten their controls and remain vigilant.

AUSTRAC Identified Risky Payments

In a letter to the online payment platforms sector, the AUSTRAC explained that its regulatory operations team discovered “a number of customers suspected to be making payments for child sexual exploitation.”

The discovery came as part of a recent supervisory campaign seeking to detect child sexual exploitation activities among the customer base of certain payment providers.

The AUSTRAC elaborated that the team identified other issues too, including low suspicious matter reporting, poor transaction monitoring and failures to identify and address higher-risk customers.  

As a result of the investigation, the AUSTRAC asked WorldRemit to appoint an external auditor. At the same time, it also sent a letter of concern to five businesses, while continuing to investigate several others.

The Failures Are Inexcusable, AUSTRAC Says  

Brendan Thomas, AUSTRAC’s chief executive officer, commented on the discoveries, saying that some payments, unfortunately, were likely tied to exploitation.

The team conducted their own transaction monitoring simulation, identifying suspicious customer behaviour and transfers that were very likely payments for child sexual exploitation.

Thomas noted that the suspicious client accounts should have been closed immediately due to the severe risk they posed. The accounts in question have now been referred to the Australian Border Force and law enforcement.

Thomas added that the payment providers’ failure to identify some of these risky accounts is inexcusable.

Failure to effectively monitor for suspicious transactions and to submit timely reports means we miss out on critical intelligence our customs and border, and law enforcement agencies can use to catch the offenders and other criminals.

The AUSTRAC noted that there are 90 payment platforms operating in Australia, 50 of which are also registered as remitters. All of these businesses are required to comply with Australia’s AML and CTF laws.