Blog post

Continuing Financial Crime Trends during COVID-19

Charity, Unemployment, Utility and Coronavirus Treatment Scams continue to target the Elderly and Unemployed

As access to the financial system has decreased due to the COVID-19 crisis, criminal activity has increased in several areas of interest, with much involving various forms of social engineering[i] and technology. This increase is largely due to the inaccessibility of conventional banking; in turn, fraud and money laundering conspirators have had to adapt. While many of us in the Banking Compliance arena do not personally feel susceptible to these types of scams, it continues to be important to consistently communicate to our members and customers regarding schemes and the propensity for financial loss by misdeeds and misrepresentation.

The elderly are specifically susceptible to both online and in-person COVID-19 scams. Many of these scams tend to take advantage of fear by attempting to sell fake cures and preventative medicines specifically formulated for the coronavirus. Other scams are even more nefarious, involving individuals offering services such as grocery and medicine shopping and delivery, ultimately taking the funds up front from immuno-compromised or elderly persons, and disappearing without delivering the items.[ii]

An interesting twist on specific abuses of the elderly and disabled involves caretakers, nursing homes, and assisted living facilities attempting to withhold the stimulus checks of those under their care.  The Federal Trade Commission goes on to assert it is receiving reports, “facilities are trying to take the stimulus payments intended for their residents on Medicaid…requiring those people to sign over those funds to the facility…claiming that, because the person is on Medicaid, the facility gets to keep the stimulus payment.”[iii]

Meanwhile, the CARES Act[iv] is due to expire at the end of July, 2020, with the Federal Government currently deliberating on its extension. This impending expiration has given rise to many Utility Shutoff Scams, where an unsuspecting recipient receives a phone call from a scammer reporting to be a utility demanding payment from a number of methods to avoid shutoff.[v] These methods often involve the use of prepaid cards, remittance, or basic debit or credit card information over the phone. Additional CARES Act-related scams involve the pre-funding of unemployment benefits and additional stimulus payments, none of which have been approved yet.

Social Engineering tends to play a large role in many of the schemes we see today. To end on an obvious note, but if it seems to good to be true, it more than likely is!









About the writer

Dave Gowan

Dave brings a unique blend of experience as a former investigator and compliance officer with multi-billion dollar asset financial institutions. Dave has a 15+ years of career experience from the armed forces; to financial crime / fraud investigation; to complete compliance officer responsibilities. Dave brings a pragmatic and practical approach to the industry, grounded in fact and working knowledge of financial regulations. Dave has been with PayLynxs for over 4 years.