coronavirus fraud preventionCOVID-19 (Coronavirus) fraud has been a growing concern to both government and business. New fraud tactics have targeted unemployment and COVID-19 economic relief funds. Find out the challenges of the U.S. War on COVID-19 fraud and how organizations can protect themselves.

New COVID-19 Schemes and Fraud Prevention

From people posing as healthcare workers to steal personal information, fake vaccines sold to false identities filing for unemployment; fraud has become a target of the Coronavirus (COVID-19) pandemic. The increase in unemployment applications and emergency funds appropriated by Congress may have been a green flag for new fraud tactics. Hawaii reported more than $15.8 million in unemployment funds lost to fraud or identity theft. Pennsylvania estimated up to 58,000 people were impacted by unemployment fraud. COVID-19 fraud has been increasing for businesses and government sectors.

When the Coronavirus pandemic started, many businesses were forced to close. This moved many people and businesses to higher interactions of online shopping, banking, and unemployment applications; creating the perfect setting for new fraud tactics. Businesses and Government Agencies are in a constant war of preventing unauthorized transactions or money transferred into fake bank accounts.
Stolen personal information intercepted and used by perpetrators is a leading cause for fraud. Recently the U.S. Department of Justice warned of individuals posing as contract tracers to obtain personal information including social security numbers, banking, and credit card information. Contact tracing is used to identify people that may have been exposed to a person with a communicable disease. While contact tracing can help prevent the spread of the Coronavirus; personal information in the wrong hands can be used by perpetrators to steal identity.

Reports of fraud cases targeting economic benefits of COVID-19 cases have been increasing. Perpetrators take personal information and apply for unemployment or even business loans. Fake bank accounts are set-up to have money direct deposited to these accounts. One way these schemes have been intercepted is through confirmation letters sent to the victims. Other victims reported receiving pre-paid credit cards with funds that they never applied for.

When personal information is obtained by someone with the intent to commit fraud; they can apply for benefits or loans. The perpetrator can use a bank account to have funds directly deposited. Prepaid credit cards have been used to deter money sent to fake bank accounts, but it hasn’t solved the problem. A better method is taking extra measures to validate bank account information. Government agencies and businesses can prevent deposit fraud by validating bank account ownership. In the cases where the Internal Revenue Service (IRS) sent around $1.4 billion payments to dead people; there could have been a better system for validating bank accounts.

Lyon’s Commercial Data is one of the leaders in new fraud prevention tools for businesses. Their new product, Account Ownership Authentication (AOA) can now be used in a company’s system to validate that the name, address, and bank account match. The AOA service can match personal information to ensure that bank accounts match personal information and if they are in good standing or not. Whether funds are being transferred for recurring direct deposits or one-time payments; their system ensures funds are deposited into the right account.

Using new technology for both business and government can help fight the war on cyber fraud. Having the right tools can prevent business loss and costs associated with the aftermath of fraud.

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