The Department of Internal Affairs AML Group has received reports of reporting entities being used in scams and fraudulent schemes. These align with international trends and the report issued by the Financial Action Task Force (FATF) released in May 2020.
Physical distancing due to COVID-19 has created an increased emphasis on providing online services. With continued online interactions and transactions, criminals have more opportunities to commit their fraudulent activities online. It is important to note that with fraud, the placement stage of money laundering will often be inherent to the predicate offending.
Common fraud and scams identified as having increased both nationally and globally during COVID-19 include:
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Charities scams – A person poses as a relief fund for COVID-19 related relief. This could be a new charity or an existing charity where the branding or likeness of the charity is impersonated with the purpose of stealing charitable donations. Donors are asked to remit money, usually through a website, to an account offshore where the funds are quickly transferred again and are never used for charitable purposes.
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Immigration scams – A scammer impersonates a representative from an embassy or high commission demanding fees for visa renewal or administration related tasks. The scammer requests that the victim pays a fee, usually via a remittance company to an offshore individual’s account.
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Phishing and identity theft – Personal information is stolen through social media websites, online services or over email and then used to obtain financial products. It is common for identity theft to coincide with applications for credit cards or lending services.
A list of common indicators of fraud or scam type behaviours for reporting entities to be familiar with to protect their business and customers from online crime include:
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Increased volume of transactions through customer accounts.
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New accounts with high velocity activity.
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Accounts that transact with large numbers of individuals.
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New business customers.
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Personal customers who appear to be conducting business transactions.
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Charities that are attempting to establish new accounts, especially COVID-19 related charities.
What should reporting entities be doing?
The AML Group recommends reporting entities review their risk assessment and AML/CFT programme to identify any emerging risks from COVID-19 and ensure policies and processes reflect current business practices, such as increased online interactions and transactions.
Follow up any unusual or suspicious behaviour and ensure these interactions are reported to the Financial Intelligence Unit through goAML.
Conduct regular account monitoring and check that risk indicators and flags reflect the current environment.
Ensure customer due diligence and enhanced customer due diligence procedures are effective and verification of the identity of customers is completed.
Other helpful information:
There are several online resources available:
CERT COVID-19 Scam Alerts
Netsafe COVID-19 Scam Spotting
DIA Scam Awareness page
