April 6, 2020

COVID-19 pandemic demands a more robust AML/KYC

In this war against Coronavirus and fraudsters, companies now need to be more vigilant than they used to few months ago.

# Insights

When anything newsworthy happens, scammers immediately attempt to make a quick buck off the public buzz. Unfortunately, Coronavirus is the new macro episode to be used as bait by these criminals. Amid all the other afflictions triggered by the Coronavirus pandemic, there also is the dilemma of fraudsters attempting to take advantage of people’s panic. There have already been reports of individuals and businesses vending false treatments online, forwarding phishing emails claiming to be from officials like the WHO, generating malicious websites and apps that seem to give virus-related insights to gain and lock access to devices until payment is received, and collections of aids for illegal or made-up charitable organisations. Such as in Canada, scammers are calling people and claiming to be a representative from Alberta Health Services. The caller tells the person they have tested positive for COVID-19, then continues to ask for personal sensitive information such as their health-care number, identity data and bank details, and therefore their identity is robbed in a blink of an eye. In addition, breach incidents involving malware and fraudulent activities, as well as identity theft, are being reported across the globe in the wake of COVID-19.

The website “coronavirusmedicalkit.com” is another one to mention. The site asserts to offer free “vaccine kits” from the WHO for only the delivery cost. It used a picture of Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases at the US National Institutes of Health, to give the impression of an official governmental charter. The challenge, not surprisingly, is that there is no Coronavirus vaccine, much less a kit offered online that could conceivably be authorised by any genuine agency somewhere. The objective is to steal money from people who are less informed, panicked and afraid of what is coming. Scammers are successful in obtaining credit card details that enable identity theft. This is just the beginning, and we anticipate more identity crimes as the pandemic panic rises. Since 1st January 2020, the ACCC’s Scamwatch has received 94 reports of scams about Coronavirus and forewarns statistics will ascend.

Practitioners and regulators should realise that these unexpected circumstances have spawned new criminals and, subsequently, additional money laundering prospects. On 22nd March 2020, the NCA cautioned of criminals taking advantage of the COVID-19 pandemic through malicious applications, non-existent medical equipment and email phishing targeted at the theft of sensitive personal information. In the US, FinCEN has advised attention regarding investment proposals falsely advertising health services or treatments and COVID-19 insider trading. This calls for an escalating demand, rather a necessity for AML and KYC verifications compared to past. Further, for all businesses, it would be prudent to evaluate their AML policies to make sure they are prepared to deal with all AML, client onboarding, and customer due diligence matters remotely. The key to fulfilling the AML obligations in this difficult situation is to lessen the risk of identity fraud by wisely choosing a robust identity verification solution.

In this war against Coronavirus and fraudsters, Data Zoo is fully operational satisfying all your AML/KYC needs; it’s business as usual. Companies now need to be more vigilant than they used to few months ago. As with efforts to contain the disease from spreading, an iota of prevention now may be worth a hit of cure when it comes to Coronavirus fraud.

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