WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) has issued an advisory informing financial institutions of a new trend resulting from the coronavirus pandemic: medical scams.
FinCEN noted this is the first of several advisories it plans to release on financial crimes related to the pandemic.
Also, as CUToday.info reported, a well-organized Nigerian fraud ring is exploiting the COVID-19 crisis to commit large-scale fraud against state unemployment insurance programs, including the filing of bogus unemployment claims in the names of credit union staff.
FinCEN said the medical scams financial institutions need to be aware of include:
- Fraudulent cures, tests, vaccines, and services
- Non-delivery fraud of medical-related goods scams
- Price gouging and hoarding of medical-related items
Red Flags
NAFCU noted that FinCEN provided red flag indicators for each of the scams to help financial institutions detect, prevent, and report suspicious transactions associated with the coronavirus pandemic, as well as case studies for each.
However, FinCEN stressed "no single red flag is necessarily indicative of illicit or suspicious activity" and encouraged financial institutions to "consider additional contextual information and the surrounding facts and circumstances…before determining if a transaction is suspicious or otherwise indicative of fraudulent COVID-19-related activities."
In addition to the scams advisory, FinCEN issued a companion notice detailing filing instructions for financial institutions to use when reporting coronavirus-related criminal and suspicious activity, NAFCU reported.
The notice outlines need-to-know information related to:
- Bank Secrecy Act (BSA) reporting obligations
- Suspicious activity report (SAR) filing instructions
- Provision of SAR supporting documentation to law enforcement and FinCEN
- Information sharing
- Reporting COVID-19-related criminal activity
- Response and recovery of funds