When uncertainty abounds and people and governments are desperate, fraudsters see a pay day. The epidemic has proved the catalyst for wholesale theft and burgeoning of petty deceptions of internet users by cyber criminals.
Efforts to crack the ‘COVID-19 fraud’ have been intensified. The UAE set up its National Computer Emergency Response Team to curb cyber-attacks ranging from malware to phishing. The US Department of Health and Human Services has issued warnings about vaccine fraud.
The City of London Police's National Fraud Intelligence Bureau has pinpointed shopping fraud. Yet… the frauds go on and customers remain gullible. Payouts to fraudsters have ranged from a few dollars to the billions.
No background checks
Emergency loans and grant schemes have been provided by governments to keep businesses afloat. The British “bounce back” scheme, which was massively bilked by international criminals, is far from exceptional.
Fraudsters created 25,000 duplicate applications that got through the threadbare checking system. Over £1 billion was paid out by the British government to companies with offshore accounts, largely in the Balkan states, and which will never be retrieved.
In fact, this was only 4 per cent of the total paid out on the scheme - £23 billion – and the UK government will excuse its lack of control on the need to act with alacrity in an emergency.
Scam for troubled times
Fraudsters have long made millions selling fake or low quality pharmaceuticals online. Now, the COVID-19 vaccine is their scam of choice and it is being targeted at the desperate.
Most would-be purchasers know that governments are buying up and supplying vaccines in a structured way to targeted groups. But when someone comes and offers you a way to apparently cut a corner, it is easy to deceive yourself.
The risk of vaccine fraud is greater as more vaccines of dubious quality are developed. One ruse to make the offer more persuasive is to use a logo mocked up to look like it has come from a vaccine manufacturer, a state finance department, a treasury, the World Health Organization or even the courier company DHL.
Geared for greed
Fear and greed are two emotions that aid the fraudster at this time of crisis. So, fraudsters have created phishing emails telling the recipient that he has been in contact with someone diagnosed with COVID-19.
The pressure on the recipient to respond urgently and without suspicion is intense. An investigation led to a fake website that was used to steal personal and financial information. Another bogus website offered to disclose details of COVID-19 cases in the vicinity.
Greed is a big motive to succumb to fraudsters at all times - but when the economy is so troubled as now, it is yet more powerful. In one scam, fraudsters who had criminally obtained details of ticket sales and cancelled flights, were impersonating the airline to approach travellers to make the refund.
Never a second thought
They wanted bank details and other personal information for further frauds. Naive individuals will deceive themselves into seeing this as an easy way to make money.
“Shopping fraud has grown 50 per cent because fraudsters know people are buying goods from their desks. Cold calls from fraudsters are increasing,” said Graeme Biggar, the head of UK’s National Economic Crime Centre.
Schemes offering state grants to people who have financial worries are abounding. Fraudsters seek the target to open up a “booby-trapped” website, one that catches personal data such as bank details and passwords. Some schemes might even try get the recipient to make an upfront payment.
The catch is only discovered when the fraudster is found to be using personal and financial information you have given him access to.
The coronavirus has also fuelled desperation and tha’s pushing people to deceive themselves. For example, people are buying personal protective equipment, sanitizers, personal testing kits, gloves and so on from unknown sources. Some purchasers – and that has included governments - received deficient equipment that was not usable, while others received nothing at all.
The lesson here is to know your source, but at these times of tension and erratic change, information is scarce and cool heads and due diligence in short supply.
Working from home is also opening up all sorts of breakdowns in controls that fraudsters latch onto. For example, signing off invoices or making payments is normally done by people face-to-face in an office, but when people are working remotely, the fraudster has only to break into a computer system to fake a signature to divert funds.
Encode and protect
One solution has been to encode signatures to add protection. Firms that are working with reduced workforces or where the control function has been cut are also vulnerable to fraud.
To prevent being defrauded by devious and cynical fraudsters, purchasers - individuals and governments alike - need to stand back and ask themselves the question: “Is this offer too good to be true?”
As soon as you feel you need to ask yourself the question, you most likely have answered it. That will be one less pay-day for the COVID-19 crooks.
- Nick Kochan is a London-based business journalist.