Thursday 17 December 2020 11:00 am

Exclusive: 33,000 suspicious activity reports filed as Covid fuels fraud

Some 33,000 suspicious activity reports (SARs) linked to the Covid-19 pandemic have been filed this year, suggesting government schemes designed to help people and businesses through the pandemic are open to abuse.

SARs are filed by professionals working in a regulated sector, typically bankers, lawyers and accountants, and alert law enforcement to potential instances of money laundering or terrorist financing.  

In 2020 33,000 SARs have been generated on the back of the Covid-19 government support measures.

According to Jonathan Fisher QC at Bright Line Law, many of the cases likely relate to government furlough and loan schemes, and could be schemes like fictitious businesses claiming furlough for non-existent staff. 

Fisher said the figure showed that the government schemes are being abused, “they have offered an opportunity for fraud, and the criminals have taken it… you can read into this that the government systems are not as strong at preventing fraud as they should be.” 

The 33,000 Covid-related SARs pales in comparison to SARs submitted more generally, with some 570,000 submitted between 2019 and 2020. 

“In a way I’m surprised there aren’t more claims,” Fisher continued. “My approach to Covid-19 and the impact on criminality has been broadly that it hasn’t increased criminality, but it’s presented criminals with an alternative opportunity.”  

Covid scammers

Elsewhere city watchdog the Financial Conduct Authority has made attempts to crack down on fraud amid the coronavirus pandemic. The regulator is collaborating with the City of London Corporation to aid innovative firms in developing software to tackle Covid fraud.

Fraud has rocketed during lockdown, with scammers taking advantage of Covid-related government loan websites to groom customers into handing over their details. 

Impersonation frauds almost doubled during the pandemic, with scammers scooping up around £208m from fake government loan forms, phishing emails and bogus websites, according to data from UK Finance.

More than 15,000 impersonation scams were reported in the first half of 2020, marking an 84 per cent increase compared to the same period last year.

Meanwhile, investment scams rocketed nine per cent during lockdown, with criminals raking in £55.2m by duping investors into handing over money on cloned websites impersonating FCA-regulated firms.

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