The Financial Crimes Enforcement Network (FinCEN) issued another COVID-19 related alert for financial institutions about cyber-enabled crime and payment fraud schemes that continue to rise during the pandemic. The latest alert, issued July 30, focuses on the exploitation of remote platforms, email compromise campaigns and phishing, malware and extortion campaigns.
The advisory notes the following information should be shared across financial institutions with the following people: CEOs, COOs, chief risk officers, chief compliance/BSA officers, BSA/AML analysts/investigators, IT, cybersecurity units, fraud prevention units and legal departments. The latest alert follows an advisory posted on July 16 about the uptick in business email compromise schemes. These trends align with the uptick in overall fraud reported to financial institutions as noted in the FTC's data on COVID-19 related payment fraud reports. We break down the data in this report.
'Financial institutions can continue to play an important role in identifying, preventing, and reporting fraud schemes. FinCEN notes the importance of communication and collaboration among internal anti-money laundering and countering financing of terrorism (AML/CFT), compliance, business, fraud prevention, legal, and cybersecurity departments within financial institutions as well as with other financial institutions across the sector," FinCEN notes in its report.
Wire transfers are the main mode connected with email compromise fraud schemes, but more recently the FinCEN has observed BEC schemes fraudulently inducing funds or value transfers through other methods of payment, to include convertible virtual currency payments, automated clearing house transfers, and purchases of gift cards.
Credit card fraud has also been ramping up during the pandemic. Data from the FTC indicates that during the first 6 months of the year, 61,000 people have filed complaints related to card fraud. Over half of those complaints are related to fraudulent activity, many stemming from online shopping and vacation deals. The rise in CNP transactions and online shopping has motivated fraudsters to target vulnerable online sites. Here's how the data breaks down:
FinCEN is calling on financial institutions to share information related to these types of schemes as they are often connected to tracking down fraudulent transactions, money laundering, and related financial and payment fraud related crimes. In the latest alert, the organization pointed out financial institutions should be aware of the following fraud schemes:
To help combat the scams that are often born out of these times of crisis — CUNA, AACUL and ABA — the organizations that serve financial institutions have been continually updating own resource pages to keep bank and credit union leaders informed. These pages are curated daily to provide the most up-to-date news and tips.
• Credit Union Resources
• Ongoing Credit Union-Related COVID-19 New Coverage
• ABA COVID-19 Resource Page
During times of uncertainty, fraudsters find new avenues to exploit. This is especially true during the COVID-19 pandemic. Below is a running list of financial scams financial institutions should be aware of during the pandemic: