COVID-19: Fraud red flags
Often where there is crisis, there is also fraud. COVID-19 is no exception. When you’re processing international payments for your clients during this pandemic period, here are some red flags to watch for:
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
- Have you conducted business successfully before with the customer/supplier?
- Have you done any due diligence, such as phoning the new beneficiary at the number on the company website?
- Have you checked open source to see whether the new beneficiary has been previously associated with a scam?
- Have you examined the new beneficiary company’s website to see when it was created?
- Have you checked to see whether the new beneficiary is correctly registered as a business in their region?
- Have you cross-checked email and phone numbers with the website and searched them on the internet?
- Have you used social media platforms, such as LinkedIn, to provide some level of assurance as to the legitimacy of the new beneficiary?
- 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
- 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?
- Have you closely examined the latest email requesting the changes, specifically the email address?
- Have you noticed any strange behavior on their email account recently?
- Have you checked to see if any diverts have been placed on their email account?
- 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.