November 3, 2020

Uptick in Fraudulent Transactions to Exotic Locations

We have seen a few cases where newly on boarded corporates who are involved in events/hospitality, specifically weddings in exotic locations like Thailand being onboarded. These companies are then receiving funds in from third party remitters based in the UK, and providing invoices to support the supposed event, which can range from 25k to 180k. Checks on websites of these companies also show copies being taken from legitimate from websites, along with complete testimonials being plagiarised.

Checks with remitting banks have identified that these companies are running investment scams and the remitter believes they were paying for bonds with a high yield return.  The typical red flags are:

  • Companies with less than 2 years financial trading – this is different to company incorporation, as we are noticing shelf companies being used instead
  • Companies involved in event/hospitality sector with funds predominantly going to Thailand
  • Funds coming from TP – specifically GBP from UK bank account
  • Amounts are inconsistent and vary in size – between 25k up to 200k, with larger values being sent in tranches rather than in bulk

It might be worth asking your sales team to assist with checks by asking clients additional questions:

·         What is the specific purpose of the payments?

·         What is the relationship between the client and the beneficiary?

·         How long the client has known the bene?

·         Has the client meet the bene in person?

In many cases, the client may not be available for contact via the phone and may try to divert all communication to email. If phone contact is made with the third party, the voice of the client may not fit the client profile so please be mindful of this.  

These types of scams are deliverability targeting potentially vulnerable individuals and is certainly on the radar of the FCA.  I want to take this opportunity to remind you that any suspicions that a client may be vulnerable must be reported as per the vulnerable client policy.

Please also report any suspicions via the SAR reporting process and work continues on the AFEP Fraud Monitoring System which will be invaluable in highlighting these kind of issues to firms.

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