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Why We Can’t Afford To Let Scams Be Part Of The ‘New Normal’

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Why We Can’t Afford To Let Scams Be Part Of The ‘New Normal’

Unread postby firefly » Thu Jul 23, 2020 5:21 pm ... 463dda37c4

Jul 22, 2020,07:24am EDT
Fighting Fraud: Why We Can’t Afford To Let Scams Be Part Of The ‘New Normal’

Online fraud has always been a source of rich pickings for criminals, but coronavirus and its associated lockdown has made the internet even more of a happy hunting ground for scammers and con artists.

According to financial services giant Aviva’s Fraud Report, 1 in 5 (22%) of people in the UK have received emails, texts, phone calls and other communications that mentioned coronavirus and which they suspected to be a financial scam – which equates to around 11.7 million people.

The report says almost half (46%) of those who received a communication they suspected to be a financial scam didn’t report it, the most common (41%) reason being they didn't know whom to report it to.

Aviva says 1 in 12 (8%) people have been the victim of a financial scam which related to coronavirus, with 4 in 5 (78%) victims saying the fraudsters pretended to be from a company they already deal with, and 41% saying the experience negatively affected their mental health.

The variety and scope of frauds being perpetrated has expanded to embrace circumstances associated with the pandemic. For example, as the first relaxation of lockdown was announced and the prospect of summer holidays became real, crooks swung into action straight away.

Katy Worobec, who heads the economic crime unit at UK Finance, a trade body for the financial services sector, said: "Criminals are exploiting the impact of the coronavirus pandemic on people's holiday plans to commit fraud, whether it's advertising fake listings for caravans or pretending to offer refunds for cancelled flights.

"The banking and finance industry is working closely with law enforcement to crack down on these cruel scams, but we need others to play their part too. It's important that auction websites and social platforms take swift action to remove fraudulent posts and listings being used to promote holiday scams."

UK Finance advice on avoiding scams includes the following:

Be suspicious of any 'too good to be true' offers or prices – if it's at a rock bottom price ask yourself why
Do your research before making any purchases and ask to see vehicles over video if you’re unable to see them in person
Read online reviews from reputable sources to check websites and bookings are legitimate
Use the secure payment methods recommended by reputable online retailers and auction sites and don’t accept requests to pay separately via a bank transfer
Where possible, use a credit card when making purchases over £100 and up to £30,000 as you receive protection under Section 75
Access the website you’re purchasing from by typing it in to the web browser and avoid clicking on links or attachments in social media posts or emails
Question uninvited approaches and contact organisations directly to confirm requests using a known email or phone number
Only give out your personal or financial information to services you have consented to and are expecting to be contacted by.

Fake government emails
Would-be fraudsters have also pounced on opportunities thrown up by the government’s activity to help businesses during the crisis.

The Chartered Trading Standards Institute says firms are receiving bogus emails dressed in UK government branding from fraudsters offering fake business grants.

It describes one email where the recipient is told they have been awarded a Retail, Hospitality and Leisure Grant valued at £25,000. The message then asks the recipient to click a link and then enter their personal and payment details. The data is sent to scammers, who then deduct money from the account.

Katherine Hart at Trading Standards said: "I have seen so many different kinds of emails, texts, and reports of doorstep and phone scams themed around COVID-19. Businesses should be eagle-eyed when receiving emails offering help, and never click the links in them."

Insurance is another favourite with criminals. A popular 'real world' tactic is to cause an accident with an innocent motorist and then submit bogus or exaggerated claims. Another is to stage an accident with willing participants, again with the intention of duping the insurance companies involved.

Ghost brokers spook insurers
Comparison site GoCompare says so-called ‘ghost brokers’ have been active during the pandemic, selling fake cover and leaving drivers uninsured and at risk of disqualification from driving or a criminal record.

Such scams hinge on victims being asked for an upfront cash payment, which is described as an 'arrangement fee'.

YouGov survey results, commissioned by the Insurance Fraud Bureau, reveal that one in five people have seen suspicious car insurance ads on social media, with one in three being in the 18-24 age group.

Drivers usually remain unaware of their bogus cover until they submit a claim following an accident or are stopped by the police for driving without insurance. In such cases, innocence is no excuse, and victims will still be deemed to be driving illegally and left personally liable for any claims.

The minimum sanctions for uninsured driving include a £300 fine, six penalty points and the risk of having your car seized by the police.

Newly-qualified drivers receiving six penalty points within the first two years of passing their test will have their licence revoked.

Drivers will also be required to buy a valid policy, of course, and may find that they face higher premiums in the future.

Vulnerable victims
Lee Griffin at GoCompare, commented: "Lockdown restrictions have left many people struggling on reduced incomes, making them more vulnerable to fraudsters offering enticing deals. It’s obvious from the recent arrest of a suspected ghost broker who has allegedly targeted NHS workers, that fraudsters don’t have any scruples about who they rip-off.

"The cost of car insurance can be a significant expense, especially for young or inexperience drivers, or those struggling to make ends meet, which makes them soft targets for criminals.

“We’re warning drivers to be extremely suspicious of cheap insurance advertised on social media or websites, especially where the deal on offer looks too good to be true. This is usually because it is. Being aware that criminals are exploiting drivers desperate to save money and, knowing the warning signs of ghost broking scams, can help people from falling victim.

“Criminals prey on peoples’ fears and anxieties during times of crisis, so we’re concerned that the economic downturn caused by the coronavirus creates fertile ground for ghost brokers.”

Freddy Macnamara, founder of flexible insurance provider, Cuvva, says all drivers are affected by motor insurance fraud, whether they are direct victims or not: “It’s been noted with the industry that sector fraud adds around £50 to the cost of a premium of an honest policyholder.

"An unfortunate consequence of fraudulent claims is that all motorists are left having to pay more for their insurance.”

Fraud in the future
Fraudulent activity during the lockdown may have boomed, but we are likely to be feeling the consequences for some time to come – at least that’s the thinking of Tamas Kadar, CEO and co-founder of SEON, which helps companies tackle fraud: "The real fallout of the current fraud ‘boomtown’ will not be felt fully for many, many months.

"Use of the personal and financial data used by the scammer from the vulnerable in recent months will be carefully timed by fraudsters. We should plan to avert longer-term disasters as the stolen data makes its way back to market. This means encouraging openness and transparency – not calling out or attacking the businesses involved."

Kadar argues that companies fighting fraud deserve recognition for the position they now find themselves in regarding online crime: "Companies in the business of preventing fraud are now the front line against serious criminal organisations. That's a fact. But stopping bad people is a cat-and-mouse game and right now fraudsters are staying out in front.

"Recent history shows us that the fraud industry has lost its focus and is quite publicly losing the chase, especially as many businesses have jumped into digital transactions as a lifeline during Covid-19."

It may be the case that some fraud prevention tactics are actually helping fraudsters evolve more quickly.

Bence Jendruszak, SEON’s chief operating office, says people’s natural craving for privacy fosters a benign environment for criminals: "The anonymity movement is creating a safe haven for fraudsters to collaborate and expand. Not to mention the recent 'right to be forgotten' law, which could help fraudsters cover their tracks once they have used stolen data to commit the crime."

Jendruszak also counsels against what he calls 'data breach fatigue', which can cause fraud prevention to become a tick-box exercise that commands a decreasing amount of investment: "Fraudsters know this. And they prey on this level of mass acceptance. If the urgency to prevent fraud is not addressed on an emotional level in a business, as well as on a technology level, we will soon be standing at the edge of an unbridgeable chasm."

Stark warning
That's a stark warning, and it is to be hoped that businesses keep their customers' best interests at heart. But it is also beholden on customers themselves to join the fight against fraud and report suspect activity and cases of fraud whenever possible.

Crooks don’t care who they steal from as long as they get away with it, so businesses and individuals alike should be on the alert for scams at all times.
Help yourself by helping others - report your scammer here.
Google can be your best friend;use it if you have doubts about someone met online. If someone met online only asks for money, no matter what reason, it´s 100% scam.
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