Responding to the COVID-19 pandemic, the vast majority of organisations have rapidly adapted how they operate, shifting to remote ways of communicating, and creating new products and services to meet the significantly changed demands and behaviours of employees and customers.

Such dramatic changes, in such a short space of time, has inevitably created many challenges for individuals and businesses alike.  It is perhaps therefore not surprising that fraudsters are maximising the opportunities that exist in the uncertainty of the situation.  As a result, the National Fraud Intelligence Bureau (NFIB) reported the volume of COVID-19 related fraud is escalating rapidly with a new trend.

Graeme Biggar, Director General of the National Economic Crime Centre (NECC) has said that: “Criminals are exploiting the COVID-19 pandemic to scam people in a variety of ways and this is only likely to increase. We need individuals and businesses to be fully aware and prepared.”  

Given the scale of global situation, we are seeing a wide range of fraud attacks and scams emerging.  Being vigilant and responding to these threats is essential to protecting ourselves, our families and our businesses.  We therefore wanted to arm individuals and businesses with visibility of some of the realities of the frauds we’re seeing:

Exploitation of external fraud vulnerabilities

  • Authorised push payment (APP) scams – Such scams are designed to trick individuals into authorising and sending money to a fraudster.  This affects not just unwary individuals, but also businesses. Fraudsters are impersonating senior management and pressurising employees to make payments to fake suppliers.  Within business environments, these scams thrive on the breakdown of effective communication and usual checks and controls – all of which are harder to maintain when working remotely.
  • Service and product scams – Organisations are being offered tempting deals, such as personal protection equipment that is unapproved, misbranded or bearing false health claims.  Lender loan fraud scams are also increasing, where fraudulent loan companies are offering fake loans for an upfront fee.
  • Phishing scams - Phishing attempts are on the rise, looking to trick victims to send funds or click on malicious links.  The pandemic is being exploited with lures relating to charitable donations and government funding schemes, for example.
  • Application fraud – The situation is driving significant demand for financial support for both individuals and businesses.  Non-essential travel restrictions mean consumers are applying online for financial services, adding challenges to customer identity verification.  Fraudsters are also exploiting the situation to access funding through the compromise and takeover of existing customer accounts, the use of fraudulent identities, or with no intention of repaying loaned funds.

Exploitation of monitoring vulnerabilities

  • Home working-related insider fraud – Some employers may face challenges when supervising remote workers when they have traditionally relied on staffs physical presence for effective monitoring.  In some firms, the IT infrastructure may also not be adequately equipped to protect against cyber attacks directed at those working remotely.

Exploitation of COVID-19 related funding

  • Financial statement fraud and COVID-19 related funding– The current disruption is having a significant impact on many firms’ financial performance and stability.  This may drive management and/or employees to manipulate and misrepresent financial statements.  Similarly, new government support provisions, such as employee furlough and various business support schemes, are likely to be exploited by fraudsters, both individuals and businesses by making false representations of their circumstances.

Responding to change

In this challenging time, organisations are responding to increased COVID-19 related fraud risks.  However, organisations need to be continuously vigilant and adapt to a rapidly evolving threat environment.

To learn more, about COVID-19 related fraud and fraud risk management contact us directly for further support.