COVID-19: Fraud red flags

Red flags: when a client adds a new beneficiary

• No website.
• If a website exists, it was created very recently and is either a signpost website or a website with little depth.
• The new beneficiary company is not registered as a business.
• The invoice provided is full of errors and formatting problems.
• There is little or no open source footprint of the business.
• The new beneficiary conducts all contact on social media platforms, such as WhatsApp and Skype, as opposed to phone calls.
• The email address associated with the new beneficiary is not a company domain (it may be a personal email address).

What to do: ask yourself these questions

1. Have you conducted business successfully before with the customer/supplier?
2. Have you done any due diligence, such as phoning the new beneficiary at the number on the company website?
3. Have you checked open source to see whether the new beneficiary has been previously associated with a scam?
4. Have you examined the new beneficiary company’s website to see when it was created?
5. Have you checked to see whether the new beneficiary is correctly registered as a business in their region?
6. Have you cross-checked email and phone numbers with the website and searched them on the internet?
7. Have you used social media platforms, such as LinkedIn, to provide some level of assurance as to the legitimacy of the new beneficiary?
8. Have you performed callback verification correctly?

Red flags: when a client requests to change a beneficiary

• You receive an email requesting a change in beneficiary bank details and/or the beneficiary name.
• The email may include a reason for the change most likely related to the COVID-19 pandemic.
• Emails are from a lookalike email address similar to the original email address.
• New invoices have formatting issues specifically around the new banking instructions.
• The email may contain other errors, such as spelling, formatting, and evident copying/pasting.
• There is pressure to make the change and complete the transaction quickly.

What to do: ask yourself these questions

1. Have you phoned your client’s customer/supplier directly using a phone number they have on record to check whether they requested the beneficiary changes?
2. Have you closely examined the latest email requesting the changes, specifically the email address?
3. Have you noticed any strange behavior on their email account recently?
4. Have you checked to see if any diverts have been placed on their email account?
5. Have you performed callback verification correctly?

IMPORTANT: If you suspect a fraudulent transaction or a client makes an allegation associated with fraud, get in touch with your client relationship manager immediately.