Fraud awareness

Summary:

Convera actively engages in utilizing the financial system to advance the business and financial interests of our customers. Convera places a high priority on security so that our customers may continue to conduct business with peace of mind.

While fraud is preventable, bad actors will go to great lengths to find ways around established protocols, no matter how secure. The security of our customers’ transactions is essential, and Convera takes pride in mitigating the risks that may occur. Understanding the common types of scams is the most essential step a business can take to prevent fraud themselves.

Common types of Fraud

Business email compromise:

Business email compromise (BEC) is a form of a phishing attack where a criminal impersonates an individual known to the victim via a business relationship and attempts to coerce the victim into transferring funds. It is sometimes referred to as invoice diversion and has been known to various means of contact such email and direct messaging. BEC scams are a serious threat to businesses of all sizes and across all sectors globally, including non-profit and government organizations.

In the typical business email compromise scheme, the fraudsters send an email to an individual in the accounting or finance department of a company, posing as the representative of another company who are currently engaged in business, often in relation to an open invoice, requesting a wire transfer. The request is likely to include a change to previous arrangements such as a change to the beneficiary name and/or bank account. The fraudsters will likely provide reasons for the change, often for reasons that are atypical for normal business activity. The unsuspecting employee then initiates a fraudulent wire transfer to the bank account of the perpetrators’ choosing.

What are the signs and what can you do?

As a business you may be regularly receiving emails from your customers seeking payment for goods/services. It is those emails and the attached invoices that need to be thoroughly examined. The main warning signals or “red flags” include, but are not limited to, the following:

  • Changes of country for the beneficiary bank.
  • Changes to the beneficiary name, either to an individual or combined with company.
  • Reason given for change of beneficiary bank.
  • Variant or new email address.
  • Inconsistencies in the email such as times, font, spelling, grammar, structure.
  • Invoices provided are not of standard of or consistent with real invoices from supplier.
  • Urgency of the ‘supplier’ during email exchanges.

Business Email Compromise relies primarily on the change to the payment details previously associated with the customer. While it is acknowledged that regular changes do occur which never result in fraud, you can never be too careful. If you see any combination of the above red flags in relation to a transaction you should look to contact your customer/supplier directly before completing the money transfer. Contact should be made via phone using contact details you have already recorded for the entity. Do not rely on any contact details within the email you have become concerned about or any other electronic method such as text.

The following changes are possible indicators that you may be the victim of business email compromise:

  • When a supplier has been banking in the same country where they are based for several years then suddenly changes to another country with no clear connection.
  • When they are changing the beneficiary name to that of an individual from a company name.
  • When they provide convoluted reasons for the banking change.
  • If the email address has changed.
  • If the content of the email is different from what you are used.
  • If the invoice looks ‘altered’ and unprofessional.
  • If the customer/suppler is putting pressure on you to complete the wire transfer.
  • If you suspect you are the victim of business email compromise, then speak to a customer service agent or your account manager.

Investment fraud:

Investment scams claim a return on profit with little to no risk. This is frequently advertised as “investments” via cryptocurrency, real estate, or precious metals and coins. These scams often start with free training and seminars which then leads to additional training and coaching for hefty fees that promises to increase success on investment.

  • Cryptocurrency investment scams typically begin with a direct message from an individual who claims to have made a large sum of money through crypto investing and offer to show you how they did it. They will give the victim links to a website for a company with fake reports on their earnings but is not a legitimate investment company. Once the victim makes the investment, they will urge you to invest more, and then shut down their accounts without a further way to contact them.
  • Real estate investment scams make the claim that a high value property development is currently being built. They advertise high-dollar amenities with a promise of high returns on investment. Once the victim decides to invest in the property, they soon find out that this takes years more to build than expected, lacks the high dollar amenities they were promised, or isn’t built at all.
  • Precious metals and coins investment scams frequently deal with individuals who refer to themselves as “metal dealers” or “rare coins merchants.” These individuals instill a sense of urgency to the potential investor, informing them that now is the best time to invest given the current market. Not only do these scammers often lie about the market and their credentials, but once the investment is received, they often fail to deliver on their promise of resale.

Consumer fraud:

Consumer fraud is widely defined as the use of deceptive business practices that cause consumers to suffer financial loss. The victims of consumer fraud believe that they are actively engaging in legal and valid business transactions when in reality they are being defrauded. Consumer fraud is often related to false promises or inaccurate claims made to consumers, including practices that directly cheat consumers out of their money.

  • Advance fee fraud is a scam that offers a service or product only after receiving a fee for this good or service. This fee is often referred to as a membership fee, administrative fee, or handling fee. However, once the victims pay this upfront fee, it is highly unlikely they ever hear from the scammer ever again.
  • Phishing scams are one of the most common scams. Phishing scams occur when fraudsters send emails or pop-up messages on a website that alert a potential victim of a problem with their bank account, or indicate they have a refund waiting for them. Once the scammer attains the relevant banking information, they use these details to make unauthorized purchases before the victim can notice.
  • Consumer retail fraud occurs when a consumer purchases products online, often from websites for newly established companies or companies with limited web presence. The products displayed on the website are either never delivered to the purchaser or grossly misrepresented on the website. Additionally, consumer retail fraud occurs when a consumer visits an online site (e-learning, resumes, dating) and is offered a “free” or very cheap service requiring the consumer’s credit card details. The consumer then unintentionally signs up for a monthly subscription, whereby they are debited monthly based on a contract that is typically deliberately obscured from view in various ways when they sign up.

Authorized push payment fraud (APP fraud):

APP fraud is the most common type of financial scam in the United Kingdom. During an APP scam, fraudsters manipulate their victims into making payments or sharing personal details under false pretenses. Oftentimes fraudsters pose as figures of authority (police, tax authorities, etc.) or create false identities to gain the victims’ trust. They are referred to as “authorized” because they depend on the victim voluntarily transferring money to the scammer. Some of the most common types of APP frauds include:

  • Romance scam – According to the Federal Trade Commission over $547 million losses were reported in 2021 due to romance scams. Romance scammers often create fake profiles on dating websites and apps and contact their victims through social media sites such as Instagram and Facebook. The scammer builds up a relationship with the victim for an extended period and then eventually requests money for various reasons. Romance scammers often alter their story to what they think will work best given the relationship they’ve built; some lies these scammers tell include:
    • Scammers say they can’t meet you in person. They might say they’re living or traveling outside the country, in the military, or working with an international organization.
    • Scammers will ask you for money. Once they gain your trust, they’ll ask for your help for items such as paying for medical expenses (for them or a family member), buying a ticket to visit you, paying for their visa, or paying fees to get them out of trouble. They may even offer to help you get started in cryptocurrency investing.
    • Scammers will tell you how to pay. All scammers, not just romance scammers, want to get your money quickly, and in a way that makes it hard for you to get it back. They’ll tell you to wire money through a third party, put money on gift cards (like Amazon, Google Play, iTunes, or Steam) and give them the PIN codes, send money through a money transfer app, or transfer cryptocurrency. Once the funds are received by the scammer, they disappear and delete the accounts they used to contact the victim.
  • Emergency funds scam – Emergency fraud is typically a one-time scam in which a fraudster will make the victim believe that the fraudster is someone that the victim knows or that the fraudster is someone acting on behalf of someone that the victim knows who needs money for an urgent situation or emergency such as bail, fines, medical expenses, etc. The fraudster may use social media to gather personal data about the victim to make the situation seem more legitimate.
  • Grandparent scam – The grandparent scam is a variation of the emergency funds scam. In this instance the fraudster contacts a grandparent and impersonates either their grandchild, or a person of authority such as law enforcement, a medical professional, or an attorney. The fraudster describes an urgent situation or emergency (bail, medical expenses, emergency travel funds) involving the grandchild that requires money to be sent immediately. However, no emergency has occurred, and once the grandparent sends the money to the scammer, the scammer disappears.

Student tuition fraud:

For more information on student fraud please see Convera’s student guide to fraud prevention here.

Impersonation:

Recent data from the Federal Trade Commission indicates that bank impersonation is the most reported text message scam, highlighting that this resulted in over $330 million in reported consumer losses reported to the commission in 2022 alone.

When conducting business with Convera, always ensure that you are communicating with Convera via official channels – Convera’s email domain, known phone numbers, and Convera’s official website. Convera does not use a mobile application nor WhatsApp for communication.

Convera will never request any of the following:

  • We will never ask for your password
  • We never will ask for access to your computer
  • We will never ask to communicate via unofficial or unknown channels
  • We will never charge you to “unfreeze” your money

Please note that if you are a customer of Convera and believe you have been the victim of a fraud through Convera, you should reach out to your account manager as soon as possible.