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            Beware of Coronavirus-related Fraud & Money Laundering Schemes

            Veriphy - Flexible API Solution for KYC Compliance
            Our Flexible API Solution for KYC Compliance
            March 10, 2020
            SME Guidance: Digitalizing Your Client Onboarding Will Ensure Business Continuity Amidst Social Distancing Rules
            SME Guidance: Digitalizing Your Client Onboarding Will Ensure Business Continuity Amidst Social Distancing Rules
            April 29, 2020

            Criminals are exploiting this national crisis to commit fraud.

            Coronavirus, Fraud & Money Laundering:

            “Coronavirus is widening the money mule pool.”

            It has been reported by the National Fraud Intelligence Bureau that over 21 reports of fraud since February were Coronavirus-related, with victim losses totaling over £800k.

            There is also increasing evidence to show that corona-virus related scams in connection with money laundering are on the rise.

            A typical scheme usually involves poaching the unsuspecting victim with an enticing job solicitation offer via email. Usually, the process later involves the ‘employed’ individual to (normally unknowingly) launder the proceeds of crime through their own bank accounts.

            Usually these criminals target job seekers and the unemployed. With the global rate of unemployment rising at an unprecedented level, the threat of falling to scams of money laundering is particularly great.

            During a time when communities are trying to come together and help one another, criminals are seeking to exploit the pandemic for their own gain.

            Feeling Charitable?

            It has been found that criminals are adapting their techniques to exploit the good nature and heighten the anxieties of those it targets. Phishing emails are increasingly adapting to the current crisis suggesting to victims that the funds will go to ‘coronavirus relief efforts;’ trapping the individual into a belief they are earning legitimate money whilst achieving a greater good.

            There is also evidence to suggest that criminals are using authoritative techniques to appear legitimate, such as claiming to be government official bodies, the World Health Organisation (WHO) or like the above example coronavirus-related charities and non-profit organisations.

            The use of money mules is not a new tactic of money laundering criminals. Rather, the pandemic provides a unique opportunity for these criminals to widen their nets to enlist more vulnerable individuals to the world of financial crime.

            Key Considerations

            Regulated businesses need to be vigilant and have in place anti-fraud and anti-money laundering procedures & policies to combat these exploitative schemes.

            • If you have exposed your personal or business bank details to a suspected scam or if you spot fraudulent activity in your bank transactions, contact your bank or card provider immediately.
            • If your business is classed as a regulated financial entity, ensure you have the facilities necessary to carry out transaction monitoring.
            • As a regulated entity, also ensure when necessary that you have adequate procedures in place to pinpoint a potential client’s source of funds.
            • Ensure you know the nature and purpose of why the client wants to engage in business with you.
            • Carry out adequate KYC checks to verify the identity of prospective clients.
            • Report any suspicions specifically relating to money laundering to your MLRO, they will transfer your concern to the NCA.
            • Report all suspected fraud attempts to Action Fraud. They will forward the concern to the National Fraud Intelligence Bureau for investigation.

            Useful Resources

            Stop Money Mules Campaign

            Take 5 Campagin to stop fraud

            UK Finance press releases and guidance

            Prevent and protect your business from unknowingly aiding the fraudulent activities of money laundering criminals with Veriphy’s identity verification checks. Do your due diligence and know exactly who you are dealing with.
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