Update on Consumer Fraud, Including Imposter Scams and Money Mule Schemes

Consumer fraud has been on the rise amid the COVID-19 pandemic. WBA has become increasingly aware of unemployment, EIDL, and PPP fraud. On July 7, 2020, the Financial Crimes Enforcement Network (FinCEN) issued an advisory to alert financial institutions to potential indicators of imposter scams and money mule schemes. 

The advisory contains descriptions of imposter scams and money mule schemes, financial red flag indicators, and information on reporting suspicious activity. Generally, fraudsters are targeting customers, and financial institutions are advised to remain alert for potential suspicious activities. For example, a customer may be in contact with criminals impersonating organizations such as the Internal Revenue Services (IRS), the Center for Disease Control and Prevention (CDC), the World Health Organization (WHO), and other healthcare or non-profit groups, looking to offer fraudulent services to victims. 

In addition to imposter scams, FinCEN outlines money mule schemes whereby a person, either knowingly or unknowingly, transfers money that has been acquired illegally, on behalf of another. An individual may either be motivated by ignorance, a romance scam, or be complicit, with expectations of profit. For example, a financial institution may notice transactions that do not fit a customer’s history, suspicious new accounts, or otherwise atypical transactions. 

In particular, there have been schemes detected related to unemployment fraud. Financial institutions may notice a customer who receives multiple state unemployment insurance payments. The United States Secret Service has identified a crime ring behind a large volume of fraudulent unemployment claims being filed with State departments across the country. As discussed above, participants may be complicit, or unknowing of their involvement, financial institutions should remain vigilant to identify potential fraud. 

Similar to unemployment fraud, financial institutions have begun identifying fraud related to EIDL and PPP loans. Given the potential avenues for fraud, financial institutions should become familiar with the known schemes, and resources available. For additional information consider the following resources: 
FinCEN advisory. 

Fraud related to SBA loan programs. 

By, Ally Bates