Atradius warns of rise in fraud

Among the numerous detrimental effects of the coronavirus emergency has been a spike in certain types of fraud, according to credit insurer Atradius. By Richard Young

July 16, 2020 | bobsguide

Simon Rockett, head of UK risk underwriting at the company, told bobsguide that opportunistic fraudsters have capitalised on how the pandemic has affected businesses, exploiting the vulnerabilities that have arisen as a consequence of the unprecedented situation: “Many businesses have been closed for quite a while now and others have had staff working from home, with some of those staff covering tasks for colleagues on furlough,” he explains. “This means that gaps in the usual due diligence processes may have opened up which fraudsters will be looking to exploit. As businesses work towards reopening and are hungry for new sales, they may inadvertently turn a blind eye to some of the warning signals in favour of securing a sale, while others working from home may not have access to the usual systems to allow complete checks to be made.”

The problem of criminals impersonating representatives of legitimate businesses is particularly acute, he says. “Due to the availability of company accounts at Companies House, fraudsters can trawl businesses looking for their next target. We have seen a particular increase in impersonation cases, where fraudsters place orders in the name of a genuine business, often creating convincing email domains and websites with goods then being delivered to a rogue trading address. A lot of the well-known franchised fast-food chains have been targets of late, along with supermarkets and department stores.”

The problem is particularly apparent in sectors that involve the trading of goods which can be difficult to trace. According to Rockett: “No sector is immune; however, we have seen an increase recently in the metals sector, particularly for wire cables. This is in addition to an increase in fraud within the construction materials sector and the more common IT products and food-related products; milk powder is a very common product targeted by fraudsters, along with meat, fish and fruit and vegetables.”

To protect themselves against scammers, businesses should proceed with caution, says Rockett: “Don’t cut any corners, despite the pressure to reopen and get business up and running again,” he warns. “Ensure all the usual due diligence checks are carried out with any slight suspicion investigated and not ignored. Two of the most successful ‘quick checks’ to spot a fraud only take a few seconds. The first is to carry out a Google Map view of the delivery address and ask yourself if it is the type of destination you would expect from the buyer you are dealing with. The second is a search of the email domain used to place the order. If it is a very recently created domain with only a one- or two-year validity when it should be related to a long-established business, that should ring an alarm bell and further investigations should be carried out.”

Looking ahead, Rockett believes fraudsters’ methods will evolve along with the rapidly changing global situation. “The pandemic hasn’t necessarily affected the way fraudsters operate but it has opened up the number of potential targets, increasing the opportunities and vulnerable victims for them,” he says. “However, fraudsters are constantly evolving, coming up with new scams and getting more and more savvy with technology. Trying to stay one step ahead is an ongoing challenge. 

“One of the more recent scams involves fraudsters hacking into email transactions and rerouting mails with them still appearing to have been sent from the genuine contact. To combat that, wherever changes to an order are requested, always independently verify the change by phoning rather than emailing your usual contact to double check. Never take changes requested at face value.”



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