Daily fraud update: 19th March

Chris Lee

CFTC, INTERPOL joins chorus of those warning of Covid scams

A major American regulator has joined the chorus of global financial industry authority figures warning traders and investors to be on the lookout against scams during the coronavirus outbreak.

The Commodity Futures Trading Commission (CFTC) followed in the footsteps of Britain’s Financial Conduct Authority as well as the Maltese regulator by emphasising the risks posed by unscrupulous scammers.

In a strongly worded statement, the regulator said that it would “aggressively” go after those who were breaking the rules during the crisis.

“During this period of market volatility, we want to ensure the public has important information to help detect and stop fraud”, the CFTC said.

“We will aggressively pursue misconduct in our markets tied to the impact of the coronavirus pandemic. There is never an appropriate time to prey on innocent people’s fears”, it added.

A wide range of asset classes are believed to be affected by the potential spike in fraud.

One such area is stocks, with some scammers appearing to promote fake schemes purportedly selling investment access to firms which are working to stop the spread of the virus.

That warning came recently from another American regulator, this time the Securities and Exchange Commission (SEC).

Crypto fraud is also expected to be on the increase.

Britain’s regulator, the Financial Conduct Authority, recently suggested that crypto scams could well rise in the face of the crisis.

Even INTERPOL, the international policing organisation, has issued a statement warning traders to avoid the risks of Covid-related fraud.

It released a range of tips designed to help traders ensure they were not exposed to scams.

“Be aware of bogus websites – criminals will often use a web address which looks almost identical to the legitimate one, e.g. ‘abc.org’ instead of ‘abc.com’”, it said.

It also encouraged traders to “be wary if asked to make a payment to a bank account located in a different country than where the company is located”.

The statement went on to outline that there have already been some cases reported to the organisations.

In one case, the amount of money lost was six figures in size.

“Monetary loses reported to INTERPOL have been as high as hundreds of thousands of dollars in a single case, and these crimes are crossing international borders”, the statement read.

“In one case, a victim in Asia made payments to several bank accounts unknowingly controlled by criminals in multiple European countries”, it added.

According to Jürgen Stock, who is the organisation’s Secretary General, a potential rise in cases could come from “fear and uncertainty”.

“Criminals are exploiting the fear and uncertainty created by COVID-19 to prey on innocent citizens who are only looking to protect their health and that of their loved ones”, he said.

The coronavirus outbreak continues to persist, and many nations around the world have closed borders and suspended usual economic processes.

Chris Lee

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