The operational chaos caused by a crisis is creating ripe conditions for fraudsters.
The Secret Service and a who’s who of organizations with well-known acronyms – the FBI (Federal Bureau of Investigation), IRS (Internal Revenue Service), DOJ (U.S. Department of Justice) and WHO (the World Health Organization) – are sounding the alarm about COVID-19 payment scams. These watchdogs are reporting a steep rise in business e-mail compromise (BEC) attacks – where fraudsters spoof real e-mails – and phishing scams for harvesting credit card numbers and other data.
Organizations on the frontlines of combatting COVID-19 – healthcare organizations, insurers, government contractors and pharmaceutical firms – are an especially appealing target for fraudsters.
The FBI has seen growing fraud related to the procurement of personal protective equipment (PPE), medical equipment, pharmaceuticals, and other suppliers during the crisis. Bad actors have tricked state government agencies into wire transferring funds to domestic and foreign accounts controlled by fraudsters in advance of receiving COVID-19 equipment. In one case, the FBI says the fraudster claimed to represent a supplier with which the payer had an existing business relationship.
INTERPOL’s Financial Crimes Unit says it is receiving information from member countries on a near-daily basis regarding fraud cases and requests to assist with stopping fraudulent payments.
It may be a while before the curve in fraudulent incidents flattens.
With more businesses pre-paying for goods and services in the current environment, there is a substantially higher risk of a buyer being defrauded with limited possibility of recourse.
Authorities also warn that bad actors who typically focus on card skimming will likely shift their efforts elsewhere – potentially to online payments fraud – because of retail store closures.
And the pressure to generate revenue or to quickly get much-needed raw materials or finished goods into the country may tempt well-intentioned employees to ignore red flags on new suppliers or fraudulent e-mails that appear to have been sent by established suppliers or senior managers.
Mitigating the risks of payments fraud and compliance issues during a crisis starts with reviewing internal controls, reminding employees of relevant policies and procedures, and remaining vigilant.
But an omni-channel payment solution also helps mitigate payment risks.
The operational disruption caused by a crisis raises the risk of payments fraud and compliance issues.
Using suppliers that were not fully vetted and screened, not validating changes to an established supplier’s banking information, making payments without the usual invoice approvals, and not being able to physically monitor payment processes are some of the vulnerabilities that businesses face.
An omni-channel payment solution will mitigate the risks of payment fraud and compliance issues, during good times and bad. The technology combines unwavering controls, administrative workflows, card payments, managed services, and industry standards to protect payments and related information.
Want to learn how an omni-channel payment solution can help mitigate your organization’s risks during a crisis?