Pub. 9 2019-2020 Issue 6

12 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S www.coloradobankers.org FEATURE ARTICLE Keep Your Bank and Customers Safe From Coronavirus Fraudsters BY BECKI LAPORTE, CFCS, CAMS I n the past weeks, COVID-19 caused by the new coronavirus has affected nearly every aspect of day-to-day life. To combat the pandemic, businesses have already taken many steps. Most have needed to work toward constant cleanliness and have reassured customers through email. The travel industry has offered incentives for customers to keep traveling while constantly providing updates on the virus. Business emails, news programs, social media and even grocery store small talk cannot avoid the topic. As such, people around the world have given and received information and advice on almost every facet of the virus, frompreventive measures and the latest cancellations to the status of toilet paper at Costco. Sometimes it seems as if there is as much misinformation as there is information. While most of us do our best to filter through the advice we find helpful or ludicrous, that general sense of public unease and concern offers an opportunity for scammers to shine. Financial institutions must consider whether they are inoculating themselves for the onslaught of crime designed to take advantage of the confusion. The Virus of Coronavirus Scams Financial institutions might think that COVID-19 is out of their control or focus. But amid the chaos and confusion, all financial institutions have to protect customers from the scams that have likely already started. Scammers are opportunistic. They feed on panic and fear. For instance, scams flourish right after natural disasters (e.g., hurricanes and earthquakes) and scammers will pull on victims’ heartstrings to encourage them to donate to a “worthy cause.” In reality, that money does not support victims, but rather the scammers and their network. Scammers command a sense of urgency and panic to extort money from countless individuals. Common COVID-19 Cons Scammers host an arsenal of fraud tacticsduring times like these, but here are a fewcommon cons that your institution should be aware of: • Fraudsters might claim a relative or friend is stuck in a foreign country and can only get home if one immediately wires funds to a random bank account. According to the fraudulent claim, without those funds, the person will be incarcerated in a foreign prison. • Similarly, another common scam supposedly places victims on a list “leading to incarceration,” e.g., a bogus FBI or IRS list. It should come as no surprise that paying fees will get that victim off the list. Financial crime experts could fill libraries with scams they have encountered and victims that have been harmed. • There are also likely shell companies already created with agents telling potential victims that they are working to find a virus cure and are just waiting on FDA approval or something similar that