By Jamie Jemmeson ACSI, MSTA: Head of Structured Products at Infinity International

COVID-19 has resulted in a global economic crisis that is now hitting Europe and the US with full force. Sadly, during periods of crisis, global levels of fraud may increase. In March, Action Fraud, the UK National Fraud and Cyber Crime Reporting Centre, released data showing a 400% increase in coronavirus-related cybercrime and fraud since mid-February. Professor Mark Button, Director of the Centre for Counter Fraud Studies, has also highlighted evidence that recessions generally result in a great increase in fraud.[1]

The Office for Business Responsibility (OBR) is predicting that UK GDP could fall by as much as 35% as trade is hit by the pandemic; other predictions have been for a circa 7.5% drop in GDP. In short, at this stage it is still probably too early to make any clear-cut forecasts as the situation appears to change on a weekly basis. However, based on what we have seen historically it is almost inevitable that fraudsters and other criminals will be looking at this crisis as an opportunity.

According to Professor Button, “these predictions could mean fraud levels increasing by at least 30.3% and possibly even doubling if the 35% fall was to occur”.

Working within the international payments space we have seen first-hand several instances where our clients have been targeted by fraudsters. We have controls and processes in place to help mitigate and reduce the chances of this happening.

Below are some useful tips from our in-house fraud prevention experts:

  1. Take a moment to think before parting with your money or information. It’s OK to reject, refuse or ignore requests – only criminals will try to panic you or pressure you into a decision.
  2. If you’re buying goods from a company you don’t know, do some due diligence first. Look at Companies House, look for reviews or ask for business references which you then independently corroborate.
  3. Be suspicious of receiving emails which you are not expecting. “Phishing” messages often pretend to be a legitimate organisation. Don’t click on any links or download any attachments. Look at the details of the sender’s email address or telephone number and if in doubt – call the company on a known number. For example, if you receive a call from someone claiming to be from your bank you can hang up and call the phone number on the back of your debit card. If you suspect a Phishing scam, you can report it to https://www.ncsc.gov.uk/information/report-suspicious-emails. This service was created in late April and already resulted in over 80 fraudulent web campaigns being removed.[2]
  4. If someone (e.g. a supplier or a colleague) contacts you to ask you to make a payment to different bank details, call them and confirm the request on a known phone number.
  5. Protect your PC, laptops, tablets and smartphone with strong passwords and security programs such as spyware and anti-virus.
  6. Be mindful of people unexpectedly contacting you to invest in “good causes” such as vaccines or PPE with promises of lucrative returns. Always ensure you are dealing with an authorised firm by checking the FCA Register and check that the contact details match.
  7. If you think you have been scammed, contact your bank immediately and report it to Action Fraud.

We don’t currently know how long or hard the economic downturn will be as a result of COVID-19, what history can prove is that fraud increases in recessionary conditions. Opportunistic fraudsters will always target society as it becomes more vulnerable. Finally, like in life, if it sounds too good to be true, then it probably is.

[1] Figures taken from https://www.portsmouth.co.uk/health/coronavirus/lockdown-could-lead-highest-ever-levels-fraud-and-cybercrime-portsmouth-professor-warns-2542584

[2] https://www.actionfraud.police.uk/news/public-embraces-email-reporting-service-created-after-spike-in-coronavirus-related-scams

 

 

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