FinCEN recently released the first of what it expects to be a series of advisories related to fraud and scams resulting from the COVID-19 pandemic. This first advisory gives us 22 red flags, as well as, case studies for three different types of medical-related fraud and scams.
This involves the sale of fraudulent COVID-19 cures, tests, cleaning products, vaccines and other services and has been detected by several federal agencies.
This is where fake companies advertise test kits, masks, drugs, and other items for “sale” (via websites and robocalls). These may be products they don’t even have and/or never intend to deliver.
Price Gouging and Hoarding
Finally, as the name indicates, this is when an individual or entity accumulates a large volume of masks, gloves, hand sanitizer, toilet paper, etc., to sell at above market prices.
Be sure to check out the Advisory for red flag indicators of each type of fraud.
FinCEN reminds institutions to consider all facts and circumstances before you determine whether a transaction is suspicious. If you do feel a transaction is suspicious and related to the COVID-19 pandemic, FinCEN also reminds you to provide all relevant information available to you on the Suspicious Activity Report (SAR) form and narrative. In addition, you should do the following, as outlined in the Advisory:
- Include “COVID19 FIN-2020-A002” in Field 2 of the SAR, (the Filing Instruction Note) and the narrative.
- In Field 34 (Fraud), select “Other”. Then, include the type of fraud and/or name of the scam or product. The example provided was “Product Fraud – non-delivery scam”.
The Advisory also refers to FinCEN’s COVID-19 Notice which reminds institutions of BSA obligations during the pandemic, including SAR filing and providing supporting documentation; information sharing; reporting related criminal activity; as well as, the response and recovery of stolen funds.
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Diane joined Banker’s Compliance Consulting with over 10 years of compliance experience and over 15 years of experience within the financial industry. Diane is a Certified Regulatory Compliance Manager (CRCM) and has a Bachelor’s Degree in Sociology with a concentration in Criminal Justice. She is a graduate of the Schools of Banking Compliance School and has participated in various other training opportunities throughout her career. Diane understands firsthand the struggles banks face in building and maintaining successful compliance programs. Her experience and common sense approach to consumer compliance is a great asset to our clients.
Diane and her husband have two kids who keep them busy. She enjoys running and other sports and is a big Bugs Bunny fan! She’s a bit crazy in that she does enjoy reading some of these regulations and she’s a “crazy cat lady!” Her cat tales are hilarious!