This Coronavirus COVID-19 pandemic is causing fear and uncertainty among companies and individuals. Fraudsters are taking advantage of this situation to cause further harm so watch out for these scams.
At a time when the world is facing this unprecedented Coronavirus COVID-19 pandemic, fraudsters and scammers are like viruses of a different kind. They prey on our panic and confusing by pretending to be professionals working for a well-known organisation or government agency, tricking us into schemes that will end up costing us and companies money when we can least afford it.
What are some of the schemes they are using?
Depending on your circumstances and level of need, there are several different types of fraud you should look out for.
Online shopping
This affects companies as well as individuals. As shortages appear in supply chains due to stockpiling or simply because a supplier has had to shut its operations to protect staff, fraudsters can imitate alternative suppliers, particularly on mass shopping sites like Amazon, eBay and AliBaba. What you think you’re getting and what you actually get may be different. There’s huge potential for counterfeit products to proliferate given current circumstances and especially where normally vigilant staff may be stretched.
A classic example is with hand sanitiser. As trusted brands run low on supply, imitation products start to proliferate and potentially dangerous products begin to enter the market. Some of these products use different types of alcohol which may cause harm like skin irritations or something more sinister.
For business owners in the retail (brick and mortar and online), you may be forced to seek alternative product sources. However, supplying counterfeit products or substitutions, particularly safety equipment, may leave you vulnerable to criminal charges even if you were completely innocent and were not aware that the products are fake.
If you see products from companies claiming to supply particular well-known brands with plenty of stocks available, while other companies have run out of stock, then it’s likely to be a case of ‘if it’s too good to be true, it’s probably fake’. The best thing you can do is to avoid them.
Investment fraud
During the 2008 financial crash, there were many scams that tried to take advantage of extremely volatile markets. They preyed on investors who had lost a significant amount of value in their portfolios and enticed them towards ‘safer’ investments. Many of these schemes turned out to be Ponzi Schemes, the most notable example from the crash of 2008 was the one run by Bernie Madoff. These scams still exist today.
Even legitimate-looking schemes involving traditional safe-havens, such as precious metals, higher interest deposits, private placements and real estate opportunities can also be run by fraudsters, luring unwary investors who are driven by panic and uncertainty.
Beware that criminals feed on our fear. When the world sees high volatility in investments and stock markets caused by uncertainty, such as during this Coronavirus pandemic, the fraudsters will be out in force.
Phishing
Soliciting personal information through fake emails and phone calls, phishing is an old favourite for scammers. This Coronavirus outbreak presents many new opportunities for them.
Expect fake emails from official health bodies offering links to information sources that aim to trick you into giving away sensitive personal information. Be vigilant of fake emails designed to cause confusion to the already scared public from local health authorities and government departments.
Watch out for emails promising cures or even drugs that claim to suppress the effects of COVID-19. Not only are the products useless, but the act of giving credit card details or personal details away during purchase gives the scammers what they want.
Fake grants
In response to the COVID-19 crisis, many governments around the world have unveiled urgent measures to keep companies afloat and prevent significant job losses. In the UK, the government has announced plans to help companies and individuals through grants and loans too. While the intentions are good, many of these plans are announced in a hurry without specific details showing how exactly companies and individuals can apply. Needless to say, this leaves plenty of room for fraudsters to take advantage of and introduce ‘fake’ application processes that are designed to cause further financial harm to companies and individuals who are already struggling.
Here is an example of ‘advanced fee’ fraud. Fraudsters will set up a website that looks like an official site such as a local authority. Many of the site’s pages may even be copied from the real authority site to gain your trust. However, the page that the fraudsters want the victims to engage with is entirely fake. The aim is to obtain personal details through an application form and eventually get the victims to part with money.
The victims will receive an email or even a phone call encouraging them to take advantage of a grant or other cash related scheme by applying through the website. Once the application is submitted, the victims will get an email congratulating them on being accepted and they are then instructed to pay for a pre-paid card to receive the funds through. To qualify, the victims have to make an advance fee payment to the card, often to pay for initial administrative costs which will be refunded as part of the grant or loan they will receive. Once the victims have made the payment, the details of the card are then requested along with confirmation statements. This is enough for the fraudster to remove the money placed on the card, leaving the victim out of pocket.
Working with Blackhawk
Helping companies to implement effective measures to detect and prevent fraud is one of the main services provided by Blackhawk Intelligence’s London office. If you are concerned that your fellow directors and employees may fall victim to fraudsters and scammers during this pandemic, our cross-functional team of Digital Fraud Services and Workplace Investigations is ready to help.
Give us a call on +44 (0)20 8108 9317 and use our contact us form to drop us a line.
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This post is intended to provide information of general interest about current business issues. It should not replace professional advice tailored to your specific circumstances.
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