AUTHOR: Valerie Carlson
DATE: February 1, 2021
How Serious Is The Covid Financial Fraud Problem (And How Do We Cure It As A Community)?
Last month – January 2021 – The Law Society’s Alexandra Cardenas interviewed Guildhawk’s Head of Integrity and Multilingual Due Diligence, David Clarke, for a Society podcast. Alexandra wanted to know how Covid-19 has influenced fraud, what the risks are to business in general, and the legal profession specifically, and how we can all protect against it. As Chairman of the Fraud Advisory Panel, and having led the Covid-19 Fraud Watch Task Force, David was happy to share his insights into current trends, expectations for the future, and – crucially – how businesses can avoid becoming victims or enablers of fraud. He also offered some pointers for handling current threats based on Guildhawk’s own internal policies – sometimes it really does pay to have an ex-police officer on the team!
Speaking about how Covid-19 has affected fraud, David spoke about the unprecedented billions of pounds that have been pushed out in the UK as part of stimulus packages, and how fraudsters use fake IDs and other companies’ details to steal this money. These individuals then require someone legitimate to give them cover as they move and invest that money. So firms must be vigilant about this, even at a time where the prospect of new business is so welcome.
Guildhawk Head of Integrity and Multilingual Due Diligence, David Clarke
He also spoke about the importance of secure technology systems and clear controls. With many teams working from home during lockdown, there are often fewer controls in place. David advised that, on the contrary, controls at the current time should be more rock solid than ever, now that the chance to quickly check something with the person at the next desk has been removed.
Maybe less obvious as a tool for preventing fraud is to take good care of your people. Guildhawk has ramped up welfare activities significantly since we all started working from home. Isolation has mental and physical health effects, and – as David suggested – lonely people are prime targets for the likes of romance fraudsters and pedigree puppy scams.
And finally, the two simplest ways to fight fraud – education and information sharing.
David described how companies must help their people to stay safe. He gave the example of how every member of the Guildhawk team has been trained in security and fraud vigilance – this can be as simple as learning to recognise a suspicious email and report it quickly to the right people.
Based on their experience of the Covid-19 Fraud Watch Task Force – which brought together 72 organisations, including the Law Society – David and Alexandra also discussed the huge benefits of information sharing, particularly across sectors. David was quick to note that it’s communities that defeat fraudsters; that, by working together, it is well within our power to defeat these small but well-organised criminal groups and ensure aid money reaches honest people in need.
David and Alexandra’s interview is available here: https://www.lawsociety.org.uk/topics/coronavirus/fraud-awareness-and-covid-19-podcast
For more resources and information on how to deal with financial fraud, from the Fraud Advisory Panel and the Law Society, visit https://www.lawsociety.org.uk/topics/coronavirus/coronavirus-covid-19-cybersecurity-fraud-prevention-and-lawtech
As David mentions in the interview, if you have been the victim of fraud, please do report it to Action Fraud, and help protect individuals and businesses from being further targeted.
Photo of the Law Society Hall by Peter Coombe, from Wikimedia Commons; Photo of David Clarke © Guildhawk