Fraudsters tend to keep a step ahead of everyone. If you think you understand the problem of fraud and economic crime now, you may see it change by June due to the pandemic’s impact. That’s a finding from the Australian Institute of Criminology‘s report on fraud and its relationship to pandemic and economic crises.
It says the following fuel those changes:
- Expected socio-economic impacts of COVID-19
- Changes in human motivation
- Opportunities
- Guardianship capabilities – that’s where individuals in the community/workplaces carry out ‘natural surveillance’ if something seems amiss to help prevent and uncover fraud.
As well, the official data could distort the scale of the problem. This depends on authorities changing how they monitor, police, or regulate fraud.
Fraud involves intentionally using deception or other means to dishonestly gain a benefit or cause a loss. Fraud isn’t the result of error, accident, or carelessness. The National Recovery and Resilience Agency says both employees or external parties, such as service providers, contracts, individual recipients of agency funding, or organised crime groups, can be the perpetrators.
So why do we see more fraud when disasters happen?
What is disaster fraud?
Fraudsters see the wake of a catastrophe as an opportunity to defraud others. Generally, they engage in soliciting donations, contractor and vendor fraud, price gouging, property insurance fraud, or forgery.
As a business, here’s what to expect from those who target victims of disasters. ‘Storm chasers’ or ‘disaster chasers’ could:
- Offer to inspect property damage and do the repairs for an upfront payment
- Try to charge you fees to help you lodge a claim with your insurer, or take a percentage of the insurance payout
- Discourage you from dealing with your insurer directly
- Persuade you to immediately sign a contract.
Ensure whoever you deal with is licensed and they can show you proof, says the Australian Securities & Investments Commission.
For example, during the 2019-20 bushfires, fake fundraisers tried to dupe people using social media accounts such as Global Charity Australian Wildlife and Nature Recovery Fund and the Australian Red Cross Save Australia Official.
How to spot a fake charity
After a disaster event such as bushfires or floods, for example, supposedly well-meaning people set up fundraising appeals. They may:
- Appear to represent well-known and real charities, but their branding could mismatch the real logo colours and styles and have spelling errors
- Pressure you via cold calling, sending direct messages to direct you to fake websites or social media pages asking for donations
- Thank you for a donation you’ve never made, as a way to lower your resistance
- Ask for funds via cash, gift card, or wire transfer, which are difficult to trace
- Ask for your personal and financial information that they can use to steal money or your identity
- Use crowdfunding websites that do not guarantee a return of your money if the page is proven to be fake