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"Trust me, I'm an avatar " or how coronavirus will help criminals drain your bank account

Nigel Morris-Cotterill

In this page from the on-line resource "Don't be a victim: the Young Person's Guide to the Risks of Financial Crime," the financial crime risks facing everyone, young, old and that huge bit in the middle, arising from the Coronavirus and CoVid-19 pandemic are explained clearly.

As the world comes to terms with the realities of the novel corona virus and the disease it creates, CoVid-19, it is inevitable that criminals are taking advantage.

And just because you are young doesn't mean you are immune from that particular threat. In fact, you are just as much a target as everyone else, no matter what their age, social status or education.

Within a month of the announcement of the disease in China and with the measures taken by China and other countries to try to control its spread, businesses across South East Asia were already beginning to suffer from a dramatic and sudden loss of Chinese tourists, a group that governments have courted and which form a substantial proportion of the tourism economy of many countries in the region. Many businesses have focussed a large part of their business on developing relationships with the tour companies that bring in plane-loads of tourists every day.

Criminals see every threat to someone else as an opportunity for them.

In one seven day period in early February 2020, before the World Health Organisation declared a pandemic, we saw a series of frauds:

1. the massive inflation of prices for face masks - and hoarding of masks. Boxes of masks which cost a few dollars were broken up and individual masks being sold by hawkers controlled by organised crime groups for the price of a box.

2. the increase in spam relating to home and other loans. The originators probably did not expect an instant response but were part of a campaign to create an impression of normality when, as subsequently happened, loan rates fell - and in anticipation of home-owners starting to run into difficult as economies take an inevitable downturn.

3. on-line frauds started to increase before the disease even before cases outside China started to become more than one or two isolated cases. In the UK, we saw advertisers promoting masks that were out of stock and taking payment even though they had no idea when new stock would arrive. We also saw deliveries "go missing" in transit and deliveries of different product that did not meet the specifications of that ordered.

As the situation has developed, we have an increase in on-line prostitution, a trend that is increasing dramatically. One website we have been referred to and are now monitoring has seen criminal gangs respond to travel bans and closures of bars and clubs where they would normally place their prostitutes. That website has seen a dramatic increase in the number of Chinese and African women with scant profiles. Many of the Chinese have their names only in Chinese. There is also an increase in prostitutes from "the Stans" and Russia which, before the travel ban, were favoured by middle eastern men.

We have monitored several on-line sales platforms and there is a significant rise in counterfeits of reputable brand-name masks, particularly N95 masks. N95 are, actually, an industrial specification and they are not cheap. There are adverts for masks for just over USD2.

There are also artificial deep discounts on many goods using fake high "original price" tags - something that is illegal in the UK but seems to be the norm across many other markets.

Some advertisers "pad" keywords with many, many adverts for the same product. Some advertisers use many different identities so as to give the illusion of competition.

But it's social media and dating sites where the most dangerous criminals are lurking - and ramping up their efforts to separate you from your money. The various schemes explained on other pages - including "money mules" - are being promoted more heavily but it's the "send me money" fraud that the CoVid-19 situation is being exploited for.

We have seen a number of cases in which social media has been used to post messages about this person or that who is ill and in need of treatment which the poster cannot afford. While most of the readers of this page will not have a LinkedIn account (think of it as Facebook that pretends that it's all about business connections), it's useful to know that even amongst supposedly alert people in senior positions in business, there is exactly the same gullibility as there is in the outside world. LinkedIn has many fake profiles which fraudsters use for exactly the same as they use fake profiles for on Facebook. There has been a rash of people writing essentially the same story: "I've taken time off work to look after my sick father and now I've run out of money for his medicines and/or hospital bills. Please help me." Of course, they go on for much longer.

As we write this, in early March 2020, this is what we expect to see and these are the things you should look out for:

1. Communications using any method from chat applications through spam to networking / friends / dating platforms asking for money for e.g. a funeral, for emergency treatment, for long term care... literally anything from any source.

Lesson to learn

DO not send money even to someone that you have known online for some time and think you can trust. Creating that illusion is the fraudster's job.

2. Offers to lend money at attractive rates even if the proposed lender is named in the communication.

Lesson to learn

Fraudsters will assume that a certain percentage of their targets need money at any given time and at times of crisis, that's even more so. If you've lost your job, or your parents have lost one or both incomes - even if it's temporary - you are vulnerable - even when you are trying to help out your family. Remember that as official interests rates fall, you don't need to go to marginal lenders who a) may be loan sharks in disguise or b) intending to get you involved in something like a county lines arrangement.

3. Offers of easy money and part time work from home jobs. Even if it appears in your Facebook or Instagram, etc, feed in response to a post from you saying you're having a tough time.

Lesson to learn

As you've seen on other pages, these are often either so-called money muling money laundering schemes or frauds which will leave you in debt to your bank.

4. Fraudulent sales, price gouging (as the Americans call it) i.e. inflating prices of scarce, or supposedly scarce, goods and counterfeits will grow massively.

Lesson to learn

Don't be conned. Online sales platforms such as marketplaces are absolutely stuffed with fake goods, artificial discounts and frauds. Yes, some of them offer refunds where you get fake, damaged or different goods but that's no use when your money is tied up. Remember that you have much better protection when you pay with a credit card than by any other method - and debit cards are very poorly protected.

5. pump and dump schemes where promises are made of rapid increases in share prices or other speculative investments.

Lesson to learn

Don't even think about responding to unsolicited offers for shares, virtual currencies. The entire premise is to get you to buy shares to drive up demand and then for the promoters to sell to people like you in one last round and leave you holding worthless shares.

6. trust scams - just because the person in the photo is pretty or handsome doesn't mean that it's the person who operates the account - and no matter how nice they look or how loveable they seem from their messages, if they ask you for anything, even months later, don't even reply - just block them. And never give your off-line information, including phone number and especially not your address to anyone before you have met them in real life somewhere where you are safe and ideally with a friend nearby at all times.

THE BIG LESSON TO LEARN

Never, ever, post on any social media, any information about your personal circumstances. You might think that the fact that the owners of the platform make everyone register using a mobile phone number presents a degree of security. It doesn't. Every time a dating or share trading scam is raided, it is found that each operator has dozens of profiles, each of which are "authorised" by a mobile phone which is later used for off-platform communications.

If you tell the world that a relative is in hospital, there is a fair chance that someone is going to offer you help with funeral expenses.

Facebook friends, for example, are rarely friends. They are just like someone standing in the street earwigging what you and your friends are talking about and looking for a way to profit from it.

Be aware. Be careful. Be safe.

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The pocket-money on-line course "Don't be a victim: the Young Person's Guide to the Risks of Financial Crime," is published by our sister division Financial Crime Risk and Compliance Training and costs GBP7.50.

For more details and to purchase the course, please visit www.financialcrimeriskandcompl...