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Subsidy fraud during corona: Fraudsters do not hesitate in crises

The coronavirus has hit the world with unprecedented speed and many companies have fallen victim to its effects. The Federal Cabinet and some German states decided to support these companies quickly and unbureaucratically. Unfortunately, fraudsters have taken advantage of this and submitted unlawful applications for emergency aid. This development clearly shows how important fraud prevention and security are and that sometimes you have to think like a fraudster to anticipate their latest tricks.

In the current situation, rapid action is the top priority. This is the only way to limit the consequences of the Covid-19 pandemic in the best possible way. In order to contain the economic consequences of the outbreak, the Federal Cabinet has approved emergency aid in the amount of 50 billion euros for small businesses, the self-employed, freelancers and farmers. A number of federal states are also making funds available. It is essential for the affected recipients that these funds are distributed promptly. However, shortly after the application for emergency aid started, it had to be suspended in some federal states due to fraudulent activities. Unfortunately, I have often experienced in my career that the transfer of funds often brings criminals onto the scene who want to enrich themselves. I hold many workshops on fraud prevention and have had to witness far too often how companies have become victims of fraud. That is why my colleagues and I are committed to provide our customers with the best possible support in fraud prevention.

Beware of phishing emails and fake websites

In order to stay up to date and see through new scams early, my colleagues from fraud management regularly screen forums on the darknet. Here, right at the start of the emergency aid program, we also saw posts in which criminals discussed how they could best obtain the funds. At a digital team workshop at the beginning of April, we suspected, based on clear threads on the darknet, that there could also be phishing attacks, whereby fraudsters try to obtain sensitive company data. On April 6, a colleague had found such a suspected phishing website, which resembled the official websites of the respective countries. If searchers entered the term “immediate help” for the federal state in which they are located, the fake website was usually the first to be displayed. The reason: the criminal operators had placed it there with the help of Google Ads. Of course, we reported the website immediately. Shortly afterwards, the payment of the emergency aid was suspended. While the payments continued after the security gaps were closed, an investigation group of the public criminal prosecution offices was set up to take action against the operators of such fake websites. Nevertheless, the fraudsters have already caused damage with their machinations and have shamelessly exploited the current challenging situation and the willingness of federal and state governments to provide support. Companies that urgently need liquid funds have to accept longer waiting times due to the suspended payment of emergency aid. Moreover, improperly distributed funds could ultimately damage our entire economy.

Nip new scam tactics in the bud

We are also unable to completely rule out further attempts at fraud for emergency aid. One of the reactions on the darknet to the cessation of emergency aid payments was: “It was quick until they noticed that it is too easy to get the money 😆. And is still easy to get.” We have also noticed other registered domains indicating that there may be more attempts at fraud. However, for the time being, we can only speculate as we cannot see who has registered these domains. In conclusion, we can say that we have observed that fraudsters are constantly professionalizing themselves and using the latest technologies. This is why it is so important for us to follow their discussions on the darknet as well as keep our fraud prevention technologies and tools up to date.

My team and I want to support you with this expertise and currently offer 15 free fraud prevention workshops. These provide you with valuable insights into the latest fraudsters’ tricks. We will work with you to investigate your specific fraud phenomena and identify weaknesses in your existing fraud set-up. Register here for the free Fraud Prevention Workshop.


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