MELISSA FRAUD SHIELD

LASCO Financial Services has revealed that it began holding back 30 per cent of donations made through the Government’s Hurricane Melissa relief platform after its system flagged as suspicious, a number of transactions linked to the Office of Disaster Preparedness and Emergency Management (ODPEM). LASCO said it remitted 70 per cent of the money received to ODPEM daily while the reserve was being held, with more than 95 per cent of all donated amounts having been paid over to the agency by the end of March, before the 30 per cent withholding was discontinued in June after the risk associated with the account returned to normal. The disclosure provides a new explanation for the arrangement, which came under scrutiny after the Auditor General’s Department found that 30 per cent of online donations had been retained for up to 45 days by a financial services institution, without a formal written agreement governing the retention. The audit found that $15.7 million and US$298,429 in donations withheld between October 28 and December 31, 2025 were due to be transferred to ODPEM by February 15, 2026. However, the financial services institution told auditors on March 9 that none of the withheld funds had yet been transferred. Four days later, ODPEM provided a transfer receipt showing that $16.1 million and US$305,292 had been sent on March 9, but the auditor general said she could not independently confirm that the money had reached ODPEM’s accounts because the agency had not provided the relevant bank statements. LASCO Financial, in a July 31 letter to Public Accounts Committee (PAC) Chairman Julian Robinson, said the decision to retain the money followed a review of the risk associated with the account after its payment system detected suspicious activity. According to the company, the 30 per cent was not treated as money belonging to it, but as a refundable security reserve intended to protect against possible losses arising from disputed or fraudulent card transactions. The company said a July 8, 2024 agreement with ODPEM expressly provided for a refundable security reserve, but no reserve was instituted at the time, based on the risk assessment then in place. LASCO Financial said the 45-day period was based on guidance from its banking partners, who advised that this was the period within which a customer could challenge a transaction. “If a charge-back occurred due to ODPEM transactions, without reserve, LASCO would have to absorb full loss,” the company said, adding that the arrangement was “standard practice by financial institutions in these types of transactions”. A charge-back occurs when a card transaction is challenged and the money is reversed through the banking system. LASCO said the reserve was therefore intended to ensure that money would be available if a transaction processed through the donation platform was later disputed and reversed. The company said the donation button remained active on the Government’s Support Jamaica website and continued to receive contributions, while the withholding arrangement was eventually discontinued in June after the risk associated with the account had returned to normal levels. The latest explanation comes after the issue was raised during a meeting of the PAC on July 28 at which questions were asked about why a financial institution had been allowed to retain a portion of disaster donations and whether there was a formal agreement authorising the arrangement. At that meeting, ODPEM Director General Commander Alvin Gayle told the PAC that the funds, which had prompted the auditor general’s concern, had since been received by the agency. Gayle also acknowledged that there had been no formal arrangement specifically governing the retention of Hurricane Melissa funds, even though there was an existing agreement covering the processing of donations. In a subsequent August 31 response from the Office of the Prime Minister (OPM) to questions from the committee, the Government said the legal teams of ODPEM and LASCO were still discussing the terms of the agreement. The OPM also told the PAC that ODPEM selected LASCO after assessing the available payment-processing options. It said LASCO is currently the only financial services provider with which Amber Innovations Inc — the company behind the relevant licensed payment products — has granted a non-exclusive licence for a payment-based solution to merchants.