FinCEN Warns Of COVID Scams Targeting FIs, Consumers

The Financial Crimes Enforcement Network (FinCEN) issued a press release warning financial institutions (FIs) and consumers about pandemic-related scams, including some connected to cryptocurrency.

FinCEN warns that bad actors “are engaged in fraudulent schemes that exploit vulnerabilities created by the pandemic.” That includes malware and phishing schemes, extortion, business email compromise and more, sometimes involving demands for cryptocurrency.

In terms of cryptocurrency, the release pointed to phishing and malware attempts in which fraudsters talk about pandemic-related financial aid like the CARES Act in attempt to glean payments. That could include talking about ways to make money through digital currency schemes like cryptocurrency. It could also mean impersonating organizations trying to provide teleworking capabilities, fake mobile apps or hijacking or spoofing attacks.

Tell-tale signs, the release stated, include suspicious emails or text messages that appear to be from disreputable sources, or texts or websites revolving around the coronavirus that seem dishonest.

In addition, FinCEN said in the release that the large shift toward digital access has opened up gateways for scammers to engage in fraud targeting FIs’ remote systems and customer-facing processes. Red flags could include name spellings that don’t match government-issued IDs, pictures that are blurry, low resolution or have aberrations, and if a customer refuses to provide other forms of ID.

And the release warns of business email compromise schemes, usually focused on healthcare or municipalities, with scams such as contacting companies and convincing them to reroute payments to new accounts, the release stated, or asking for supplies that are supposedly needed. Signs to watch for in those cases include transactions with different language, amounts or timing from previous messaging, different email accounts, or instructions to move payments from checks to ACH accounts due to the pandemic.

Fraud has become widespread during the pandemic, with scammers taking advantage of the general confusion and imperfect transitions to digital during the frantic times.