Fraud on the rise due to Coronavirus

We are in a period of great uncertainty and apprehension. The cumulative impact of factors such as market volatility, employment/income uncertainty, and interest rate cuts are creating conditions and an environment where fraud could potentially thrive.

With investment markets plunging over recent weeks, and the Bank of England cutting the base rate to a record low, pension and investment customers and savers may be tempted to withdraw or transfer money from their plans. Attempting to recover short term losses from retirement savings or needing to generate more income from investments, lured by fraudsters falsely promising early access to pension funds (‘pension liberation’) or unusually high rates of return, customers could end up losing out by falling victim to an investment scam.

Fraudsters are misusing the name and brand of large, reputable organisations – such as Zurich – to add credibility to their scams, in order to try and deceive people and steal their money. These are known as brand scams.

Fraudsters can use Zurich’s name and logo, or similar variations of them, to make claims such as ‘backed by Zurich’ or ‘underwritten by Zurich’, to promote fraudulent schemes, promote or sell fake or invalid insurance products, and trick people into believing they are genuine. Typically, fake websites are set up to promote such schemes and facilitate the fraud. False policy documents may even be provided to delay detection of the fraud.

Supposed investments can be anything from land, wine, precious metals, crypto-currency, foreign exchange, binary options, shares and bonds, but increasingly fraudsters will promote products and services not dissimilar to those genuinely offered by the organisation they are impersonating. Often these investments will advertise unusually high returns, which may be attractive under financial constraints in the coming weeks and months.

The National Cyber Security Centre is warning that criminals are exploiting fears over the Coronavirus outbreak to target victims online. At a time when people could be under tremendous stress, they may be more susceptible to falling victim to fraudulent scams.

Social engineering is the psychological manipulation of people into performing actions or divulging confidential information. It can be facilitated in a variety of ways: via email (phishing), phone calls (vishing), text messages (smishing), or social media posts. Often claims of help are made, such as providing a safe haven for people’s money, investment opportunities, tax refunds, even medical guidance and information.

Using Coronavirus as a headline to gain attention, the criminals then attempt to get recipients to disclose personal or financial information, or click on links that contain malware. Any information collected is then used for criminals’ own fraudulent purposes, such as identity fraud.